Directors Report of State Bank Of Bikaner and Jaipur

Mar 31, 2015

FINANCIAL HIGHLIGHTS

NET INTEREST INCOME

The Bank''s total interest income increased from Rs.8168.56 crore during
2013-14 to Rs.9005.45 crore during 2014-15, recording a growth of
10.24%. Interest expenditure increased by 13.45% to Rs.5344.78 crore, as
against Rs6064.02 crore in the previous year. The net interest income
recorded a growth of 4.16% to Rs2941.43 crore, as against Rs2823.78 crore
in 2013-14. The net interest margin (NIM) stood at 3.37% at the end of
March 2015.

NON-INTEREST INCOME

The non-interest income of the Bank has increased by 5.71% from
Rs.876.34 crore in 2013- 14 to Rs926.39 crore during 2014-15. The
increase during the year as compared to the last year is mainly on
account of increase in profit on Sale of Investment of Rs15.38 crore and
recovery in Written-off accounts to the tune of Rs16.19 crore.

OPERATING EXPENSES

The operating expenses declined by 12.05% from Rs2005.46 crore in
2013-14 to Rs1763.71 crore during 2014-15. This is due to decrease in
staff provisions from Rs543.69 crore in 2013-14 to Rs254.90 crores during
2014-15.

PROFIT

During 2014-15, the operating profit increased to Rs2104.11 crore,
recording a growth of 24.16% as against Rs1694.66 crore in the previous
year. The net profit recorded a growth of Rs45.18 crores (6.17%) from
Rs731.69 crore in 2013-14 to Rs776.87 crore in 2014-15.

DIVIDEND

During the year 2014-15, the Bank declared an Interim Dividend of 143%
i.e. Rs14.30 per equity share (face value of share Rs.10/- per share)
which is same as the dividend of 143% i.e. Rs14.30 per share declared in
the previous year. Record date for ascertainment of entitlement of
shareholders for Interim Dividend was 31.03.2015. Interim dividend may
be treated as final dividend.

KEY FINANCIAL INDICATORS

The Return on Assets of the Bank stood at 0.84% during 2014-15 as
against 0.87% in the previous year. The return on equity (ROE) stood at
12.92% at the end of March, 2015. The earnings per share increased
from Rs104.53 in 2013-14 to Rs110.98 in 2014-15, while the book value per
share improved from Rs765.13 in 2013-14 to Rs858.95 in 2014-15. As at the
end of March, 2015. The capital adequacy ratio of the Bank stood at
11.69% and 11.57% as per Basel II and III norms respectively, as
against 11.71% and 11.55% as per Basel II and III norms respectively,
as at the end of March, 2014. This was well above the RBI benchmark of
9%. The Bank''s Gross NPA ratio and Net NPA ratio decreased from 4.18%
and 2.76% respectively as at the end of March 2014 to 4.14% and 2.54%
respectively, at the end of March, 2015. The average business per
employee increased to Rs11.00 crores during 2014-15, as against Rs9.77
crores in the previous year. The net profit per employee remained same
at Rs6.00 lacs during 2014-15. The average business per branch increased
to Rs123.22 crore during 2014-15, as against Rs121.26 crore in the
previous year.

CREDIT MANAGEMENT

The overall credit demand remained muted during the FY 2014-15 due to
overall slowdown in the economy leading to lower level of investment
activity. However, the Bank continued to focus on qualitative credit
growth and faster credit delivery.

Total advances of the Bank grew by 8.90% during 2014-15, as against
growth of 11.72% during 2013-14.

In the backdrop of stress in the various segments of the industry, the
impetus of financing remained mainly towards top rated PSUs and other
sectors such as Real Estate (RH), textiles and NBFCs etc.

In view of the prevailing competitive and stressed market scenario,
closer interaction and regular meetings by the Top Management with high
value customers at major centers in the country resulted in booking of
several good quality advances.

PERSONAL BANKING

Personal Banking Segment continued to be the thrust area. The Bank''s
retail operations recorded robust growth during the year 2014-15.

Personal Segment deposits recorded a growth of 16.60%, and increased to
Rs57462 crores as at end of March, 2015. Acquisition of new customers
remained one of the focus area consequently resulting in increase of
customer base by 26% with opening of 34 lac new CASA accounts during
the year. The Bank''s savings account deposits also grew by 13.90%
during the year to Rs28536 Crores.

PERSONAL FINANCE

In Personal Segment lending, Bank was committed to fine tune the
products and service delivery to the market expectations. Most of the
prime P Segment products have undergone fine tuning in its features.

The Bank''s Home loan and Personal loan disbursements recorded a robust
growth of 24.23% and 22.53%, respectively. The overall P Segment loan
portfolio has grown by 18.36% to Rs12187 Crores during the year.

Online approvals: Online in-principal approval for Home loans and Car
loans have attracted good number of new customers to our fold.
In-principal approvals of Rs598.50 crores and Rs382.70 Crore were
accorded during the year for Home loans and Car loans respectively.

PRIORITY SECTOR LENDING (PSL)

Bank gives utmost importance to lending to Priority Sector and during
the FY 2014-15, more than 60% of the total growth in advances is
registered under priority sector. The Priority Sector Advances of Bank
is 42.54% of ANBC at the end of 31st March 2015, as against the RBI
stipulation of 40%. In value terms priority sector advances grew Rs5127
crore from Rs22733 crore to Rs27860 crore during 2014-15. To meet the
specific need of this sector Bank is sensitizing the operating
functionaries at the branch level to give special attention to
Agriculture, MSE, Education, Housing, Export Credit etc. Special thrust
is also given on increasing awareness among operative staff about
targets/ sub-targets and products/schemes for lending to Priority
Sector.

AGRICULTURE

Lending to agriculture remained one of the major thrust areas of the
bank. The outstanding level of agriculture advances increased from
Rs10962 crore as at the end of March 2014 to Rs11927crore as at the end
of March 2015.

The flow of credit in agriculture stood at Rs9672 crore during the
current financial year as against Rs7669 crore during the last financial
year. Agriculture advances constitute 18.21% of the Adjusted Net bank
Credit (ANBC).

The Bank has issued 71046 Kisan Credit Cards (KCC) with sanctioned
limit of Rs1928 crore during the financial year 2014-15. The Total
number of KCCs stood at 628428 at end of March, 2015.

PROGRESS UNDER FI PLAN (2013-16)

As per RBI FIP Plan (2013-16), the Bank was required to cover 3144
villages by BCs up to March, 2015. As against this, the Bank has
covered 7048 villages. Bank''s Branch Network has also crossed the
milestone of 1250 branches to touch 1261 branches by opening 117
branches during the year. 935299 accounts have been opened through BC
channel against the target of 6,00,000.

PROGRESS UNDER PMJDY

The Bank took the PMJDY Scheme announced by the Hon''ble Prime Minister
in true spirit and 24.61 lac accounts have been opened under PMJDY, out
of which 11.24 lac accounts are in rural areas and 13.37 lac accounts
are in urban areas. Deposit of Rs599.66 crore has been mobilized and
21.52 lac Rupay Debit Cards have been issued under PMJDY up to
31.03.2015.

The Bank completed the task of opening of one account per household in
its allocated SSAs (Sub Service Areas) before 31.12.2014.

Rupay debit card having inbuilt accidental insurance cover of Rs. one
lac and Life Cover (LIC Scheme) of Rs. 30,000/- is also available to
the beneficiaries who opened their accounts for the first time from
15.08.2014 to 26.01.2015.

STATUS OF SSA COVERAGE

The Bank has been allotted 1948 SSAs (Sub Service Areas) in our Service
Area in Rajasthan and in other States. Out of this, 1935 SSAs are in
Rajasthan. The Bank covered all these SSAs either by opening of
branches or by engagement of Corporate/ Individual BCs.

FINANCIAL LITERACY

The Bank has 9 FLCCs in its Lead Districts and till 31.03.2015, 1298
counseling camps have been organized and 91511 people counseled in such
programs. Out of these, 39422 people are linked to Banking system and
1529 people have benefited with credit linkage. After launch of PMJDY,
SBBJ has organised 312 Financial Literacy camps, where 16182 persons
have been counseled. Our rural branches regularly meet the villagers
and hold Financial Literacy Camps. Wide publicity is ensured and
financial literacy material is distributed in those camps.

DIRECT BENEFIT TRANSFER (DBT)/ (DBTL)

All our branches are enabled for individual & bulk seeding of Aadhaar
numbers in accounts. Our nodal branch for DBT is uploading the seeded
data on NPCI mapper on daily basis. We have issued newspaper
advertisements in leading newspapers to improve our Aadhaar Seeding
position.

LEAD BANK SCHEME

Bank is shouldering Lead Bank responsibility in nine Districts in the
State of Rajasthan viz. Bikaner, Barmer, Hanumangarh, Jaisalmer,
Jalore, Pali, Sirohi, Rajsamand and Udaipur. The Bank has been
implementing and monitoring the Annual Credit Plan and other
developmental and poverty eradication schemes launched by the Govt. of
India, Govt. of Rajasthan and NABARD. Against target of Rs4564 crore in
9 Lead Districts for Annual Credit Plan for the year 2014-15, we have
disbursed Rs6342Crore, achieving 139% % of the annual targets.

MICRO CREDIT (SHGs)

At the end of March, 2015, the Bank has credit linked a total of 44624
Self Help Groups with outstanding amount of Rs535.70 crore, out of which
35654 accounts are of women beneficiaries with outstanding amount of
Rs467.29crore Ministry of Finance, Govt. of India launched a project for
financing to Women Self Help Groups with the support of Anchor NGO as
SHPI in 24 backward Districts of 24 States in the country, later on it
was extended to 150 back ward Districts, including 109 Left Wing
Extremism (LWE) districts. In Barmer District, NGO has Linked 1269 SHGs
by SB Linkage and 1090 SHGs by Credit Linkage during the year against
the targets of 1000 up to March, 2015.

By the end of March, 2015, 39911 candidates have been imparted training
for various local demand jobs in these institutions and by imparting
skill trainings, 4795 candidates have been engaged in various jobs and
18180 candidates have started their own ventures. 9666 persons have
been credit linked amounting to Rs6589.75 lac. All our RSETIs have
secured AA /AB rating indicating overall good position.

GOVERNMENT SPONSORED SCHEMES

The Bank continued to play a pioneering role in financing entrepreneurs
under various governments sponsored schemes. Under National Rural
Livelihood Mission (NRLM scheme) the Bank sanctioned amount of Rs100.53
lacs to 114 beneficiaries. Similarly, under Prime Ministers Employment
Generation Programme (PMEGP) an amount of Rs3028.99 lacs was sanctioned
to 690 beneficiaries and Rs1365.89 lacs to 4511 beneficiaries under POP.

REGIONAL RURAL BANK

Rajasthan Marudhara Gramin Bank (RMGB) has come into existence on
01.04.2014 with the amalgamation of the erstwhile Marudhara Gramin Bank
(MGB), sponsored by SBBJ and Mewar Anchalik Gramin Bank (MAGB),
sponsored by ICICI Bank). The Bank is playing vital role in the economy
of the 15 districts of their area of operation by extending financial
assistance to both priority and non priority sectors.

SBBJ continues to provide managerial support and financial assistance
by way of refinance etc. to RMGB. All branches of RMGB are on CBS
platform and provide Electronic Fund Transfer facility. RMGB has
installed its five on site ATMs and one mobile ATM. RMGB has a deposit
of Rs6332 crore and advances of Rs4572 crore as on 31.03.2015. RMGB
recorded a net profit of Rs90 crore.

II) MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs)

The Micro, Small and Medium enterprises(MSME) sector contributes in a
big way to the growth of Indian Economy with a vast network of over
5.77 crore units, creating employment for more than 8 crore people,
manufacturing more than 6000 products, contributing about 45% of
manufacturing output and about 40% of exports. As on 31st March, 2015,
Bank''s total exposure to Micro, Small and Medium Enterprises (MSME)
sector was Rs11719 crore in more than 144000 MSME units. MSME Segment is
one of the key growth areas identified by the Bank and constitutes more
than 15% of Bank''s total advances. During the year, Bank has sanctioned
credit facilities to more than 25804 new MSME units amounting to Rs2555
crore. The loans upto Rs.10 lacs in SME is Rs1424 crore.

Bank is extending collateral free loans up to Rs1.00 crore to MSE sector
under CGTMSE Scheme of Credit Guarantee Trust, which provides 50 to 85%
guarantee cover on eligible MSE accounts for limit up to Rs100 lacs.
Bank has covered 3149 fresh accounts amounting to Rs122 crore during the
FY 2014-15 under CGTMSE.

GOVERNMENT BUSINESS

The Bank conducts Government Business on behalf of State/Central
Government through 985 Authorized Branches. Income Tax, Central Excise,
Service Tax, Value Added Tax (VAT) etc. are collected through physical
chalans and also through the electronic mode. The Bank has established
a Centralized Pension Processing Centre (CPPC) which calculates as well
as credits pension to the accounts of pensioners across all the
branches. Bank also has an online treasury Branch for online payment of
salary of Rajasthan Govt. employees on behalf of the State Govt.
Presently our online Treasury Branch is processing 9.75 lakh State
Govt. transactions received through 18000 digitally signed files in a
month. During 2014-15, the Bank has earned Rs96.18 crore commission
income from Government business.

Bank''s forex dealing room at Mumbai and all the authorized category ''B''
branches are equipped with latest technology for real-time
communication and are connected through SWIFT network with more than
750 offices of foreign banks throughout the world. The Bank maintains
21 NOSTRO accounts in all major currencies and non-account
correspondent banking relationship with all major banking groups in the
world. To facilitate NRI customers for inward remittances, there is
online remittance facility and tie-up with 4 Gulf based Exchange
Houses.

The Bank also undertakes proprietary Forex trading to increase profit
by taking advantage of market movements. Our Merchant forex turnover
stood at Rs31186 crore at the end of March 2015, as against Rs31678 crore
for the same period in last financial year representing a marginal
decrease of Rs492 crore (1.56 %) during the year.

Our NRI deposits stood at Rs1630 crore at the end of March 2015 as
against the base of Rs1384 crore in March 2014, registering a growth of
Rs246 crore (17.77%).

Our export credit stood at Rs2544 crore at the end of March, 2015 as
against Rs2740 crore at the end of March, 2014, recording a marginal
decrease of Rs 196 crore (7.15 %) during the financial year.

INDUSTRIAL REHABILITATION

As at end of 31st March, 2015, the Bank had 19 large sick /weak units
on its books with aggregate outstanding of Rs278.55 crore. There are 47
Corporate Debt Restructuring cases with aggregate exposure of Rs3038.36
crore and 18 BIFR cases with exposure of Rs343.27 crore. The Bank has
been acting as BIFR''s Operating Agency in 4 cases. During the year
under review 8 accounts with aggregate exposure of Rs996.28 crore have
been restructured under CDR mechanism as warranted basically by the
tight economic scenario.

AUDIT

State Bank of India, with the concurrence of the Reserve Bank of India,
approved the appointment of 4 firms of Chartered Accountants viz. M/s
M.K. Agarwal & Co. of Delhi, M/s Chaturvedi & Co. of Kolkata, M/s
Uberoi Sood & Kapoor of Delhi and M/s PSD & Associates of Jaipur as the
Statutory Central Auditors of the Bank for the year 2014-15. During
the period under review, the scope of audit covered 742 branches/
centralised processing units as against 664 branches/ centralised
processing units covered in 2013- 14.

RESPONSIBILITY STATEMENT

The Board of directors hereby states:

1. That in the preparation of the annual accounts, the applicable
Accounting Standards have been followed alongwith proper explanation
relating to material departures;

2. That they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent, so as to give a true and fair view of the state of affairs of
the Bank as on the 31st March, 2015, and of the profit or loss of the
Bank for the year ended on that date;

3. That they have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Banking Regulation Act, 1949, and State Bank of India (Subsidiary
Banks) Act, 1959 for safeguarding the assets of the Bank and preventing
and detecting frauds and other irregularities; and

4. That they have prepared the annual accounts on a going concern
basis.

CORPORATE GOVERNANCE

The details on Corporate Governance are annexed.

ACKNOWLEDGMENT

The Board of Directors is grateful to the valued customers, esteemed
shareholders and the public at large for their patronage and confidence
reposed in the Bank and places on record its deep appreciation. The
Board of Directors thanks the Government of India, State Bank of India,
Reserve Bank of India and other regulatory agencies for their valuable
support and guidance throughout the year.

The Board of Directors places on record its deep appreciation of the
commitment, sense of involvement and dedication exhibited by each staff
member and constructive role played by the Employees'' Union and
Officers Association in the overall development, growth and prosperity
of the Bank.

For and on behalf of the Board of Directors

Place :Mumbai Jyoti Ghosh
Dated :06th May,2015 Managing Director

Mar 31, 2014

The Board of Directors of State Bank of Bikaner and Jaipur have
pleasure in presenting this Annual Report together with the audited
Balance Sheet and Profit and Loss Account of the Bank for the year
ended 31st March 2014.

FINANCIAL HIGHLIGHTS

NET INTEREST INCOME

The Bank''s total interest income increased from Rs. 7498.19 crore
during 2012-13 to Rs.8168.56 crore during 2013-14, recording a growth
of 8.94%. Interest expenditure increased by 8.36% to Rs. 5344.78 crore,
as against Rs. 4932.38 crore in the previous year. The net interest
income recorded a growth of 10.05% to Rs. 2823.78 crore, as against Rs.
2565.81 crore in 2012-13. The net interest margin remained the same at
the last year''s level of 3.62%.

NON-INTEREST INCOME

The non-interest income of the Bank has increased by 20.66% from Rs.
726.28 crore in 2012-13 to Rs. 876.34 crore during 2013-14. The
increase during the year as compared to the last year is mainly on
account of increase in profit on sale of Investment by Rs. 63.08 crore
and recovery in Written- off accounts by Rs. 38.57 crore.

OPERATING EXPENSES

The operating expenses recorded a growth of 26.99% from Rs. 1579.22
crore in 2012-13 to Rs. 2005.46 crore during 2013-14. Of this, employee
costs increased by 31.20% to Rs. 1295.64 crore, while total other
operating expenditure increased by 19.96% to Rs. 709.82 crore.

PROFIT

During 2013-14, the operating profit decreased to Rs. 1694.66 crore,
(by -1.06%) as against Rs. 1712.87 crore in the previous year. The net
profit recorded a growth of 0.20% from Rs. 730.24 crore in 2012-13 to
Rs. 731.69 crore in 2013-14.

DIVIDEND

During the year 2013-14, the Bank declared an Interim Dividend of 143%
i.e. Rs. 14.30 per equity share (face value of Rs. 10/- per share).
Record date for ascertainment of entitlement of shareholders for
Interim Dividend was 31st March, 2014. Interim Dividend may be treated
as final dividend.

KEY FINANCIAL INDICATORS

The Return on Assets of the Bank stood at 0.87% during 2013-14 as
against 0.96% in the previous year. The Return on Equity decreased to
13.66% as against 15.33% in the previous year. The Earnings Per Share
increased from Rs. 104.32 in 2012-13 to Rs. 104.53 in 2013-14, while
the book value per share improved from Rs. 678.74 in 2012-13 to Rs.
765.13 in 2013-14. As at end-March 2014, the Capital Adequacy Ratio of
the Bank stood at 11.71% and 11.55% as per Basel II and III norms
respectively, as against 12.16% as per Basel II norms respectively, as
at end-March 2013. This was well above the RBI benchmark of 9%. Due to
rise in NPAs on account of continued stress faced by the industrial
sector coupled with agriculture NPAs, the Bank''s Gross NPA ratio and
Net NPA ratio increased from 3.62% and 2.27% respectively as at
end-March 2013 to 4.18% and 2.76% respectively, as at end- March 2014.
The average business per employee increased to Rs. 977 lakh in 2013-14,
as against Rs.900 lakh in the previous year. The net profit per
employee decreased to Rs.5.62 lakh in 2013-14, compared to Rs.5.91 lakh
during 2012-13. The average business per branch increased to Rs. 116.52
crore during 2013-14, as against Rs.112.42 crore in the previous year.

CREDIT MANAGEMENT

The overall credit demand remained muted during the FY 2013-14, with
GDP growth in sub 5% range due to overall slowdown in the economy
leading to a lower level of investment activity. However, the Bank
continued to focus on qualitative credit growth and faster credit
delivery. Total advances of the Bank grew by 11.72% during 2013-14, as
against growth of 16.98% during 2012-13.

Against the backdrop of stress in the various segments of the industry,
the impetus of financing remained mainly towards top rated PSUs and
other sectors such as Real Estate (RH), textiles and NBFCs etc.

In view of the prevailing competitive and stretched market scenario,
closer interaction and regular meetings by the Top Management with high
value customers were held at major centres in the country which
resulted in booking several good advances.

PERSONAL BANKING

Deposits under Personal Segment grew from Rs. 41,905 Crore as on 31st
March 2013 to Rs. 46,726 Crore as on 31st March 2014, thus recording a
growth of 11.50%.

ACQUISITION OF NEW CUSTOMERS

Acquisition of new customers was the prime focus of the Bank during the
year to augment its retail deposit base. We could open 24.97 lakh new
Savings Bank Accounts during the year, which accounts for 23.46% of the
base level. The resources mobilized in the Savings Bank portfolio was
Rs. 3,617 crores, which helped the Bank to improve its CASA deposits.

55% of the new accounts were opened by either students or youth which
reflects the Bank''s penetration amidst the younger age groups of the
population.

Nearly 73% of the total deposit in the newly opened accounts were
contributed by youth and middle aged customers ranging from 20 years to
60 years which shows the Bank''s effective linkage to salaried/ income
earning segments of the society.

MAHALAKHPATI CAMPAIGN

To encourage the habit of regular monthly savings among customers, we
have made our Recurring Deposit scheme popular through a special
campaign called "Mahalakhpati RD Campaign." The campaign was focused on
the opening of high value recurring deposit with a maturity value of
Rs.10 lakh and above. We could mobilize 27,397 new Millionaire
Recurring Deposit accounts during the campaign. We could open 70,084
Recurring Deposit accounts during the year.

SBBJ VAIBHAV & SBBJ DHANSHAKTI

We could mobilize Rs.1,190 Crore in a specially designed term deposit/
product called SBBJ Vaibhav launched during the year. SBBJ Dhanshakti,
another deposit product for short term deposit, has mobilized Rs.
104.74 Crores during the year.

PERSONAL FINANCE

The Personal finance portfolio has crossed a landmark of Rs.10,000
crore during the financial year 2013-14. The Bank continued to be
active in catering the credit requirements of P segment customers,
mainly by way of Home Loans, Car Loans, Education Loans and Personal
Loans. The advances under the personal segment rose to a level of
Rs.10,295 crore as at March 2014 from Rs.9,131 Crore as at the end of
March 2013.

During the year under review, 7,631 home loans aggregating to Rs.816
crore were granted, taking the outstanding home loan level to Rs. 3,768
crores as on 31.03.2014. Similarly 14,507 Car Loans aggregating Rs.648
crore were granted during the same period taking outstanding car loan
level to Rs. 1,452 crore as on 31.03.2014. We could disburse 37,741
Personal loans aggregating Rs.1,116 crore during the same period.

As in the previous years, the Bank contributed to support the younger
generation to pursue higher studies by extending Education Loan. To
support the efforts of Government of India to boost the sentiments of
retail/consumer durable segments, the Bank has introduced a new Scheme
for financing of Consumer Durables during the year. The other retail
segment products like Max Gain Scheme, Rent Plus and Home Cash have
been revamped during the year to make them more customer/market
friendly.

PRIORITY SECTOR LENDING(PSL)

Priority Sector Lending is the major thrust area of the Bank''s
operations. As at the end of March, 2014, the Bank''s Priority Sector
Advances increased to a level of Rs.23641 crore as compared to Rs.
20807 Crore in the previous year i.e. growth of 13.72% over March 2013.
The PSL constituted 40.73% of the Adjusted Net Bank Credit, against the
RBI benchmark of 40%. However, Priority Sector Lending in Rajasthan
stood higher at 66.40% of Rajasthan''s ANBC.

AGRICULTURE

Lending to Agriculture remains one of the major thrust areas of the
Bank. The outstanding level of Agriculture advances increased from
Rs.9188 crore as at the end of March 2013 to Rs. 10962 crore as at the
end of March 2014, a growth of 19.31%. Our Bank''s total direct
agriculture lending is 99.35% of total Agriculture advances amounting
to Rs.10911 crore, and has registered a growth of Rs.2658.90 crore
during the Financial Year under review. The flow of credit to
agriculture stood at Rs. 7644 crore against the annual target of
Rs.3500 crore during the current financial year. Agriculture advance
constituted 18.90% of the Adjusted Net Bank Credit (ANBC), against RBI
benchmark of 18%. In the State of Rajasthan, it is even higher at 37.2%
of ANBC for Rajasthan State.

The Bank has issued 109933 Kisan Credit Cards (KCCs) with sanctioned
limits of Rs.2302 crore during the financial year 2013-14. The total
number of KCC stood at 600317 as at end of March 2014.

FINANCIAL INCLUSION (FI)

In the first phase, our Bank was allocated 829 villages with population
above 2000. Accordingly 794 USBs (Ultra Small Branches) were
established using PoS technology and BCs/BCAs were engaged covering 823
villages and in the remaining 6 villages, Brick and Mortar branches
were opened. In the second phase of FI (2013-16), our Bank has been
allocated 7588 villages with population below 2000 in 1878 Gram
Panchayats which are to be covered by engaging BCs and / or opening of
branches by 31.03.2016. During the current Financial Year i.e.
2013-14 we have been allocated target to cover 1067 villages and we
have covered 1070 villages by 31.03.2014.

The KIOSK Banking Software developed by M/s TCS Ltd. and provided by
SBI has been rolled out in our Bank. Our Bank has entered into
agreement with M/s CSC E-Governance Services India Limited on
07.01.2013 and with M/s. FIA Technology Services Pvt. Ltd. (a
Corpoprate BC) on 20.11.2013 for providing the BC service. M/s CMS
Computers Ltd., which is a Service Centre Agency (SCA) of M/s. CSC
e-Governance Services India Ltd., has been allotted 19 districts in
Rajasthan for engaging CSCs as BCAs in the Gram Panchayats allocated to
our Bank. Pali and Barmer districts have been allotted to M/s FIA
Technology Services Pvt. Ltd. for engaging their BCAs. In the remaining
12 districts, our existing Corporate BCs namely Lupin Human Welfare &
Research Foundation Samiti / P2P Microfinance and Allied Services or
Individual BCs will continue to provide banking services.

AADHAAR SEEDING AND MAPPING ON NPCI PORTAL:

Our Bank has successfully implemented Aadhaar based payment system
(APBS/NACH) through National Payment Corporation of India (NPCI)
gateway. Seeding of Aadhaar Number in CBS account is under progress. We
have seeded 625759 accounts with Aadhaar, of which 616746 Aadhaars have
been uploaded on NPCI Portal.

DIRECT BENEFIT TRANSFER:

DBT has been rolled out in 121 districts across the country, of which 6
districts are in the State of Rajasthan and SBBJ is the Lead Bank in
two DBT districts i.e. Udaipur and Pali. In both the districts, banks
have opened accounts of all the beneficiaries as per the list received
from District Authorities.

MICRO, SMALL AND MEDIUM ENTERPRISES (MSMES)

The Micro, Small and Medium Enterprises (MSME) sector is crucial to the
Indian Economy. There are 3 crore enterprises in various industries,
employing approx 7 crore persons. Together, these account for 45% of
the industrial output and 40% of the exports. This sector is
contributing approx.11% per annum to India''s GDP and is critical for
the overall GDP growth. RBI has also emphasized to adopt suitable
strategies for higher lending to MSMEs. Accordingly, our Bank has also
given high priority to this area.

We have arranged MSME customers meet at Jaipur, Alwar, Bhiwadi,
Udaipur, Chittorgarh & Bikaner centres. We have also sensitized our
operating officials by way of training & seminar etc.

The Bank has assisted 21156 new MSME units during the year 2013-14. In
order to boost MSME advances, the Bank has modified its existing MSE
loan schemes to make them most competitive.

The Bank has continued its thrust to provide collateral free loans to
MSMEs under the Credit Guarantee Scheme of CGTMSE. During the year
(April 13 to March, 14), the Bank provided new collateral free loans
under Credit Guarantee Scheme of CGTMSE to MSE units amounting to Rs
119.11 crore, taking the CGTMSE covered accounts (cumulative) at
Rs405.40 crore as at the end of March 2014.

LOANS TO WOMEN BENEFICIARIES:

The Bank finance as on 31st March, 2014 to women beneficiaries has
increased to Rs 3181.21 Crore in 212925 accounts against Rs 2732.87 crore
in 204680 accounts as on March 2013, registering a growth of Rs 448.34
crore. This constitutes 5.48 % of ANBC against the benchmark of 5%.

As at end March 2014, assistance to minority communities stood at Rs.
2960.73 crore spread over 101591 accounts.

Financing to weaker sections stood at Rs. 10998.90 crore benefiting
1014090 persons as at the end of March, 2014. The assistance to weaker
sections as a percentage of Adjusted Net Bank Credit (ANBC) is 18.93%
as at end March, 2014. This is well above the benchmark of 10%
prescribed by RBI.

Laying utmost emphasis on Government sponsored schemes has been amongst
the major strategies of the Bank in pursuit of financial inclusion.
The Bank continued to play a pioneering role in financing entrepreneurs
under various Government sponsored schemes. The SGSY scheme was
replaced by National Rural Livelihood Mission (NRLM scheme) w.e f.
01/04/2013. The position under various Government sponsored schemes as
on 31 March, 2014 is as under: -

Scheme Number of Amount
Beneficiaries sanctioned
during
financial
year (Rs. crore)

Swarn Jayanti 1893 10.88
Shahri Rojgar Yojana (SJSRY)

Prime 712 34.77
Ministers Employment Generation
Programme (PMEGP)

Mukhya Mantri 2564 53.00
Swavlamban Yojana (MMSY)

POP 5612 22.55

LEAD BANK SCHEME

Our Bank has Lead Bank responsibility in nine Districts in the State of
Rajasthan viz. Bikaner, Barmer, Hanumangarh, Jaisalmer, Jalore, Pali,
Sirohi, Rajsamand and Udaipur. The Bank has been implementing and
monitoring the Annual Credit Plan and other developmental and poverty
eradication schemes launched by the Govt. of India, Govt. of Rajasthan
and NABARD. Target allotted for Annual Credit Plan to our Bank for the
year 2013-14 was Rs4011.00 crore, as against which the achievement of
our Bank up to March, 2014, was Rs.4670.00 crore, thereby achieving
116%.of the annual targets.

MICRO CREDIT (SHGs)

At the end of March,2014, the Bank has credit linked a total of 44244
Self Help Groups (SHGs) with outstanding amount of Rs.200.94 crore, out
of which 36363 accounts are of women beneficiaries with outstanding
amount of Rs.169.08 crore. NABARD had, in the past ranked the Bank as
Number One in Rajasthan State for its performance under Micro Credit
continuously from the year 2004-05 to 2008-09.

Ministry of Finance, Govt. of India launched a project for financing to
Women Self Help Groups with the support of Anchor NGO as SHPI in 24
backward Districts of 24 States in the country, which was later
extended to 150 back ward Districts, including 109 Left Wing Extremism
(LWE) districts. In Rajasthan, Barmer (our lead district), Banswara,
Dungarpur and Jhalawar districts have been selected for this purpose.

The progress in this regard is directly reviewed by Department of
Financial Services, Ministry of Finance, Govt. of India. Bank branches
and NGO have been identified and Anchor NGO, CECOEDECON has surveyed
and mapped the area in Barmer District. In Barmer District, NGO has
Linked 931 SHGs by SB Linkage and 521 SHGs by Credit Linkage during the
year against the targets of 1000 up to March, 2014.

By the end of March, 2014, 33702 candidates have been imparted training
for various local demand jobs in these institutions and by imparting
skill trainings, 4270 candidates have been engaged in various jobs and
15340 candidates have started their own ventures. 8935 persons have
been credit linked amounting to Rs.4734.45 lakh. Rating process was
introduced by MoRD, New Delhi through State Project Co-coordinator of
RSETIs in the year ending March 2013. All our RSETIs secured AA /AB
rating. Our Managing Director and Directors of four RSETIs namely
Bikaner, Barmer, Hanumangarh and Jaisalmer were honoured at the
felicitation function organized by MoRD, GoI on RSETI Diwas at Vigyan
Bhawan, MoRD, Delhi on 21/11/2013.

FINANCIAL LITERACY AND CREDIT COUNSELLING CENTRES (FLCCs)

During the year 2010-11, in order to educate farmers and other people
in rural / urban areas with regard to various financial products, Bank
schemes and services available from the formal financial sector, the
Bank had set up 9 Financial Literacy and Credit Counseling Centres
(FLCCs) in all nine Lead Districts in Rajasthan. These FLCCs are
providing awareness service, free of charge. Up to 31/03/2014, 111598
persons have been counselled by these centres out of which 23605
persons have been linked with Banks.

A campaign was launched to arrange five awareness camps per month in
nearby villages by FLCC Counsellors, which is still continuing and is
very beneficial to rural people. In addition to this, a campaign was
also launched by way of wall paintings, brochures and pamphlets. The
FLCC Counsellors also organized awareness camps in minority
concentrated blocks, in their districts.

REGIONAL RURAL BANK

The Marudhara Gramin Bank (MGB) sponsored by SBBJ with its Head office
at Jodhpur has a network of 501 branches spread over 12 districts of
Rajasthan state namely Pali, Jalore, Sirohi, Sriganganagar, Bikaner,
Hanumangarh, Jaisalmer, Barmer, Jodhpur, Nagaur, Jaipur & Dausa. SBBJ
continues to provide managerial support and financial assistance by way
of refinance etc. to MGB. All branches of MGB are on CBS platform and
provide Electronic Fund Transfer facility. MGB had deposits of Rs.
5143.57 Crore and advances of Rs. 3792.89 Crore as on 31.03.2014. MGB
recorded Gross Profit of Rs. 80.60 Crore & Net Profit of Rs. 55.50
Crore.

GOVERNMENT BUSINESS

The Bank conducts Government Business on behalf of State/Central
Government departments through 494 Authorized Branches. Income Tax,
Central Excise, Service Tax, Value Added Tax etc. are collected through
physical challans and also through the electronic mode. The Bank has
established a Centralized Pension Processing Centre (CPPC) which
calculates as well as credits pension to the accounts of pensioners
across all the branches. We also have an Online Treasury Branch for
online payment of salary of Rajasthan Govt. employees on behalf of the
State Govt. Presently our Online Treasury Branch is processing 9 lakh
State Govt. transactions received through 18000 digitally signed files
in a month. During 2013-14, the commission income from Government
business was Rs. 132 crore.

The Bank''s forex dealing room at Mumbai and all the Authorized Category
''B'' branches are equipped with infrastructure of latest technology for
real-time communication and are connected through SWIFT network with
more than 750 offices of foreign banks throughout the world. The Bank
maintains 21 NOSTRO accounts in all major currencies and non-account
correspondent banking relationship with all major banking groups in the
world. To facilitate NRI customers for inward remittances, there is
online remittance facility and tie-ups with 5 Gulf based Exchange
Houses.

The Bank also undertakes proprietary Forex trading to increase profit
by taking advantage of market movements. Our Merchant Forex turnover
stood at Rs. 31678 crore in the FY 2013-14 as against Rs. 26717 crore
of last financial year, representing an increase of Rs.4961 crore
(18.57 %) during the year.

Our NRI deposits stood at Rs. 1384 crore at the end of March 2014
against the base of Rs.1249 crore in March 2013, registering a growth
of Rs. 135 crore (10.80%). Our export credit stood at Rs.2740 crore at
the end of March 2014 as against Rs. 2334 crore of March 2013,
recording a growth of Rs. 406crore (17.39%) during the financial year.

The Bank chairs the local chapter of Foreign Exchange Dealers''
Association of India (FEDAI). The Bank is also an active member of
FEDAI, International Chamber of Commerce (ICC) and Clearing Corporation
of India Limited (CCIL).

INDUSTRIAL REHABILITATION

Rehabilitation / restructuring of potentially viable industrial unit
remains an important thrust area of the Bank. For this purpose, the
Bank has its own Industrial Rehabilitation Policy containing detailed
guidelines for undertaking rehabilitation / revival package and the
same is updated from time to time. Whenever units are found to be
non-viable or not responding to the rehabilitation / restructuring
package, the focus is shifted to recovery of Bank''s dues through legal
recourse such as action under SARFAESI / compromise settlement /
assignment of debt / through courts/ Debt Recovery Tribunals (DRTs).

As at the end of 31st March 2014, the Bank had 23 large sick /weak
units on its books with aggregate outstanding of Rs. 405.39 crores.
There are 41Corporate Debt Restructuring (CDR) cases with aggregate
exposure of Rs. 2069-68 crores and 24 BIFR cases with exposure of Rs.
498.19 crores. The Bank has been acting as BIFR''s Operating Agency in 4
cases. During the year under review, 16 accounts with aggregate
exposure of Rs. 954-26 crores have been restructured under CDR
mechanism as warranted basically by the tight economic scenario.
Sustained efforts are undertaken by the Bank in timely restructuring of
the accounts and post sanction close monitoring and follow up have
resulted in retaining most of the restructured assets as Standard
Assets.

NPA MANAGEMENT

The Bank continues with its multipronged strategy of controlling
Non-Performing Assets (NPAs) through intensive monitoring of large
value accounts, close follow-up with DRT/BIFR, restructuring of viable
accounts and effectively utilizing the remedies available under the
SARFAESI and RODA Acts. GMs, DGMs and AGMs posted at Head Office have
been assigned the role of mentors of Zones / Regions and Branches to
provide support and monitor the NPA level. Due emphasis has been given
to follow-up with the Court and filing of Execution Petitions. During
the year, large numbers of "Recovery Camps", Bank Adalats and Lok
Adalats were organized for NPA recovery, the results of which were
quite encouraging. Recovery camps are being held in every village every
week. The progress in NPA / AUC recovery is being discussed / reviewed
by the Management Committee by conducting Video-conferencing with all
the Zones and DGM headed branches. The "Loan Tracking Centre" monitors
/ tracks the irregular Standard accounts from Head Office level.
Pre-emptive measures such as restructuring etc. are also taken, as per
RBI guidelines. By adopting the above measures and utilizing the
provision of SARFAESI Act effectively, Bank also received a number of
acceptable compromise proposals which resulted in good recovery in NPA.
There has been an addition of Rs. 2123.54 crore in NPA during 2013-14.
However, there has been recovery / upgradation to the tune of Rs.
1110.77 crore. At the end of March 2014, gross NPA ratio of the Bank
Stood at 4.18% and Net NPA ratio stood at 2.76%.

LOAN TRACKING

The Bank had set up the Loan Tracking Centre (LTC), a Centralized
Outbound Call Centre at Jaipur in June 2011, for follow-up of Personal
and SME Segment Loan accounts in IRAC4, IRAC3, IRAC2 and IRAC1
categories to avoid slippages of accounts into hardcore NPAs.
Subsequently in July 2012, the LTC started following up AGR segment
accounts also. The Call Executives at the LTC make calls to the
borrowers, where contact details are available in CBS, in a sustained
manner to recover the overdue amount and upgrade accounts in co-
ordination with Branches / CPCs.

IMPROVEMENT DONE DURING THE CURRENT YEAR:

(a) LTC has been set up at all the 8 Zonal Offices of the Bank.

(b) Auto-Dialler system has been installed at the Head Office LTC,
whereby the telephone / mobile numbers of borrowers are dialled by the
Auto-Dialler system and our staff communicates with the borrower using
a Head Phone attached with the PC.

(c) With the setting up of Zonal LTCs, all the NPA borrowers of the
Bank are contacted, at least once during every 2 months.

RISK MANAGEMENT STRUCTURE OF THE BANK

The Bank has an independent Risk Management framework in place.

At the apex level, there is a Risk Management Committee of the Board
(RMCB), which oversees the policies and strategies for Risk Management
in the Bank. The Credit Risk Management Committee (CRMC), Asset
Liability Management Committee (ALCO), Market Risk Management Committee
(MRMC) and Operational Risk Management Committee (ORMC) provide support
to RMCB. These sub-committees are required to place all critical
issues/ development in their respective areas before the RMCB. The Bank
has Credit, Market and Operational Risks Management Policies for
identification, measurement and management of major risks. These
policies are reviewed and updated from time to time, keeping in view
the dynamic business environment. Integrated Risk Management Department
(IRMD) at the Head Office, functions under a Deputy General Manager.
The IRMD acts as the nodal centre for coordination with other
departments/ operating units engaged in managing risk in their
respective business areas.

CAPITAL FRAMEWORK

BASEL II : Under Pillar-I of the New Capital Adequacy Framework (NCAF)
guidelines issued by Reserve Bank of India, the Bank is computing
Capital to Risk Weighted Assets Ratio (CRAR) using Standardised
Approach for Credit Risk, Standardised Duration Approach for Market
Risk and Basic Indicator Approach for Operational Risk. Under Pillar-II
of NCAF, the Bank has assessed capital requirement for 2013-14 for
other risks in its Internal Capital Adequacy Assessment Process (ICAAP)
document, a copy of which has been submitted to RBI. Basel-II
Disclosures have been made by the Bank in the Annual Report as also on
Bank''s website as part of the Pillar-III guidelines of NCAF.

BASEL III : In order to improve the quality of capital and address the
liquidity risk issues, Basel III Capital Regulation has been
implemented in phases in India w.e.f. 01.04.2013. Accordingly, the
Bank is computing Capital to Risk Weighted Assets Ratio (CRAR) as per
Pillar-I of Basel III framework. With a view to improve market
discipline under Pillar 3 of Basel III framework and to improve
transparency of capital base, Basel-III Disclosures have been made by
the Bank in the Annual Report as also on the Bank''s website.

CREDIT RISK

Credit Risk management remains a major task for Bank and receives prime
attention. Control and monitoring of Credit Risk is dealt with as per
the Loan Policy and Credit Risk Management, Credit Risk Mitigation &
Collateral Management Policy of the Bank approved by the Board. These
policies cover methodologies for measuring, monitoring and control of
credit risk. In order to control the magnitude of credit risk,
prudential norms on benchmark, financing ratios, single borrower or
borrower- group exposure, industry specific and sector-specific
exposure, exposure to sensitive sectors, hurdle rate for taking a fresh
exposure etc. have been set up. Credit appraisal systems and a clearly
defined Delegation of Powers form an integral part of the Bank''s Loan
Policy.

MARKET RISK

To monitor market risks and treasury operations, mid-offices (domestic
& forex) are functional at IRMD. Scenario Analysis on market risk
covering events such as decline in stock markets, rise in bond yields
and foreign exchange rate movements are conducted regularly as per the
Stress Testing Policy of the Bank to assess resilience of Investment
portfolio.

OPERATIONAL RISK

One of the major tools for managing operational risk is to put in place
a well established internal control system, which includes segregation
of duties, clear management reporting lines and adequate operating
procedures.

Most of the operational risk events are associated with weak links in
internal control systems or laxity in complying with the existing
internal control procedures. The Bank has suitable systems and
procedures for managing and control of operational risks.

PREPARATION FOR ADVANCED APPROACHES OF BASEL-II

Bank plans to move over to Advanced Approaches of Basel-II guidelines
for Credit, Market & Operational Risks in a phased manner. Letter of
Intents (LOIs) for all the three Risks have been submitted to Reserve
Bank of India for this purpose. On receipt of approval from Reserve
Bank of India, Internal Rating Based (IRB) Approach for Credit Risk,
Internal Models Approach (IMA) for Market Risk and Advanced Measurement
Approach (AMA) for Operational Risk will be followed under Advanced
Approaches. This will not only help the Bank to maintain Economic
Capital, but will also strengthen the risk monitoring framework and
control aspects.

DATA CLEANSING

Augmentation of capital is not only costly but its availability is also
scarce. Hence, efforts are being made for optimum utilisation of the
existing capital. Bank aims at conservation of capital by improving
data quality. Cleansing of data will lead to accurate computation of
the Risk Weighted Assets of the Bank and is likely to reduce
requirement of additional capital.

ASSET LIABILITY MANAGEMENT

A comprehensive Asset Liability Management (ALM) System is in place for
effective management of Liquidity Risk and Interest Rate Risk. These
Risks are assessed and monitored through Structural Liquidity Reports
and Traditional Gap Analysis respectively. The structural liquidity
report is being prepared and reviewed on a daily basis as per RBI
guidelines.

Both these risks on Foreign Assets & Liabilities are being monitored
through Maturity & Positions (MAP) and Sensitivity to Interest Rate
(SIR) statements. The monitoring of liquidity on a dynamic basis, over
a time horizon spanning 1-90 days, is in place. Duration Gap Analysis
is also used to manage interest rate risk for the entire Balance Sheet.

The Asset Liability Management Policy, coupled with Investment Policy
of the Bank specifies various prudential limits for management of
Liquidity and Interest Rate Risks. The Bank is regularly monitoring
these limits. A comprehensive Contingency Funding Plan and a system of
daily monitoring of inflows & outflows of deposits are in place for
managing liquidity on a day-to-day basis. Calculation of Value at Risk
(VaR) on Foreign Exchange Forward Positions and Stress Testing on
Liquidity, Interest rate and Foreign Exchange Open & Forwards Positions
is also undertaken regularly.

INTERNAL CONTROL, INSPECTION AND AUDIT

The Bank has in place a well established independent audit system and
structure to ensure adequate internal control for safe and sound
operations. Internal Audit is carried out under Risk Focused Internal
Audit (RFIA) as envisaged under Risk Based Supervision of RBI with
focus on assessment of risk and internal control mechanism.

The branches have been categorised into three groups as per risk
perception and are subject to varying degrees of audit. During FY
2013-14, 738 Branches and 50 Centres/Processing Centres (under Business
Process Re- engineering (BPR) initiatives) have been subjected to
Internal Audit. No branch of the Bank remained overdue for audit as on
31.12.2013.

As at the end of March, 2014, 99.90% of the Bank''s branches were rated
"Well Controlled" and "Adequately Controlled ".

CONCURRENT AUDIT

106 branches and 35 Centres/ Processing Centres (under BPR initiatives)
covering 66.31% of advances and 40.70% of deposits as on 31.03.2013,
alongwith 13 Head Office Departments have been placed under Concurrent
Audit.

INFORMATION SYSTEM (IS) AUDIT

Information System Audit Cell is in place to conduct IS audit of major
IT establishments including Core Banking Project, Zonal Computer
Centres, etc. in accordance with RBI directives and Bank''s IT Security
Policy.

RECONCILIATION OF INTER- OFFICE TRANSACTIONS

As per the RBI guidelines, all the entries need to be reconciled within
a period of six months from the date of their origin. By the end of
March 2014, the bank has reconciled inter- branch debit transactions
originated up to 28.02.2014 i.e. well before the time limit prescribed.
The Bank shall aim at reconciling all entries within two months of
their origin.

INFORMATION TECHNOLOGY

1. CORE BANKING SOLUTION (CBS)

All our branches are running successfully on Core Banking Solution
(CBS). We were able to provide better customer satisfaction and
services by providing many Value Added Services like multi functional
ATMs, Internet Banking, Mobile Banking, Flexi Deposit Scheme, Multi
City Cheque Facility, instant credit of local and outstation cheques,
etc. For all type of Debit/ Credit transactions in CBS, SMS alert is
sent to customers, where mobile number is registered with the Bank.

2. ELECTRONIC PAYMENT SYSTEMS: RTGS, NEFT & SBGRPT

Real Time Gross Settlement (RTGS) is an instant payment and settlement
system and National Electronic Fund Transfer (NEFT) is a scheme for
inter- bank funds transfer operated by the RBI. All branches of our
bank are RTGS & NEFT enabled. Our customers can make their inter-bank
remittances in a faster and secured manner at very nominal cost. SB
Group Payment (SBGRPT) functionality for electronic funds transfer
within State Bank Group is also available for customer.

3. AUTOMATED TELLER MACHINES (ATMS)

The Bank has installed 467 new networked ATMs and replaced 123 ATMs
during the year to take the tally of ATMs to 1554. All the ATMs are
connected to the network of State Bank Group ATMs, thereby enabling
more than 62.50 lakh card holders of the Bank to have free of cost
access to over 45000 ATMs of the State Bank Group all over the country.

4. INTERNET BANKING

All our branches are enabled to offer Internet Banking facility to our
Retail as well as Corporate customers. Looking to the rapid increase
in the usage of Internet banking worldwide, the Bank has introduced
several new features during the year. Apart from own account and third
party transfer within bank, our customers can transfer funds to other
banks in online mode. TDS enquiry for Term Deposits from the comfort of
their homes or offices, opening / closing of e - TDR / e - STDR / e -
Recurring Deposit (RD) account, facility to view the details of Income
- Tax Statement (26 -AS) and viewing of Pension Slip is available.
Retail Internet Banking facility for visually challenged persons has
also been made available. For Corporate customers, a new facility ''SB -
Collect'', for on line collection of funds has been provided.

Online payment of direct and indirect taxes e.g. Income Tax, Service
Tax, Excise Duty, Customs Duty of Central Government, VAT/CST of
Rajasthan State Government and Maharashtra State Government, EGRAS
facility for online collection of all Tax and non Tax revenue of
Rajasthan Government, facility of online payment of Professional Tax of
Maharashtra State Govt. has also been provided. Facility of online
application for IPOs using ASBA (Application Supported with Blocked
Amount) facility where investor customer continues to earn interest
during the application process is available to internet banking users.

Facility of online booking of Railway / Air Tickets has been widely
accepted. Electronic payment of railway freight (E-Freight) is gaining
popularity. We have integrated number of Aggregators to our online
system to provide the payment facility of wide range of merchants,
e-commerce services and utility bills to our Internet Banking users.

Bank has taken steps to increase awareness about Internet banking among
staff as well as customers through seminars and awareness meets. To
popularize online payment of taxes, a facility of "Zero Balance
Internet Current Account" has been introduced.

5. MOBILE BANKING & IMMEDIATE PAYMENT SERVICES (IMPS)

Mobile Banking facility was introduced in 2009, for our customers
having a Savings / Current Account. The product is named "State Bank
Freedom. Presently, there is upper ceiling of Rs. 50000/- for fund
transfer and for purchase of goods / services per day within overall
calendar month limit of Rs.2,50,000/-. In order to make the
registration process more robust and to eliminate the threat of frauds/
phishing attempts, our Bank enabled registrations over ATM/CBS, only if
the mobile number entered matches with the mobile number already
available in the customer''s CIF in CBS.

"Immediate Payment Service" (IMPS) P2P (Person-to-Person), was launched
in our Bank in 2012 for enabling our customers to use mobile
instruments as a channel for remitting funds 24 x7 using MMID (Mobile
Money Identifier) & Mobile Number. During 2013-14, two more services
P2A (Person-to-Account) & P2M (Person-to-Merchant) has been enabled in
our Bank to make fund transfer using Account No. & IFS code and to make
various utility payments at shops and commercial establishments, ticket
booking though IRCTC website etc., The upper ceiling for remittance or
payment of bills is same as in Mobile Banking facility.

6. GREEN CHANNEL COUNTER

Bank has implemented "Green Channel Counter" facility at various
branches viz. all district headquarters in Rajasthan, branches situated
at Delhi NCR, Mumbai, Bangalore and Ahmedabad and other identified
urban, semi-urban and rural branches.

It is a paperless, eco-friendly and easy facility for the customers to
be carried out through ATM cum Debit Card using a Transaction
Processing Device (TPD) placed at the Single Window Operator''s (SWO)
terminal connected to CBS terminal of the SWO. Presently this facility
is available at 506 branches with 2 such counters minimum at each
branch.

7. PREPAID CARDS

The Rupee Pre-paid Card (eZPay Card) has been launched, particularly
for salaried persons and students for pocket money and scholarship
payments, who undertake only one or two transactions in a month and
maintain account for the purpose. The Rupee Pre-paid Card (eZPay Card)
is equally useful for the Corporate, who have to make various payments
to their staff and vendors. The cards can be reloaded and can be used
in any ATM or with any POS merchant, any number of times during their
validity period.

8. BUNCH NOTE ACCEPTOR (BNAs)

BNA machines are installed at the Bank''s 2 branches. It is a
full-functional freestanding lobby machine installed in the branch''s
Banking Hall. The BNA machine is capable of accepting Rs. 49,900/- cash
in bundles and receipt is given to the customer and cash is immediately
credited to the customer on real time basis.

9. CASH DEPOSIT MACHINE (CDM)

The Bank has planned to install CDM at various High Cash Receipt
branches providing 24×7 availability with round the clock security in
onsite ATM kiosk. The CDM machine is operable through ATM-cum-Debit
card and is capable of accepting cash up-to Rs.49,900/-. Receipt of
the deposit transaction is given to the customer and cash is
immediately credited to customer''s account on real time basis.

10. SELF SERVICE KIOSKS (SSKs)

75 Self Service Kiosks (SSKs) have been installed at various branches
of our Bank. Customers can perform financial and non-financial
transactions such as passbook printing, fund transfer etc. using State
Bank ATM- cum-Debit Cards at these SSKs. The SSK solution has user
friendly touch screen based customer interface.

11. ADOPTION OF ADVANCED IT INFRASTRUCTURE PRODUCTS FOR INTERNAL
HOUSEKEEPING AT THE BRANCHES/OFFICES:

I. BIOMETRIC AUTHENTICATION OF CBS USERS

For improved security in Core Banking Solutions, the Bank has rolled
out Biometric Authentication Solution (BAS) at branches/offices for the
front end tellers using CBS. The solution is used as a second factor
for authentication of CBS tellers, the primary mode being the CBS
password combination.

II. ACTIVE DIRECTORY SERVICES (ADS )

For enhanced security, Bank has implemented Active Directory Services
(ADS) within State Bank Connect Network in all the branches/ offices.
Active Directory (AD) provides centralized administration of network
and security. It authenticates and authorizes all users and computers
in a Windows domain, assigning and enforcing security policies for all
computers and facilitates installing or updating software centrally.

III. SB-CONNECT:

At present all 1100 branches/offices are connected through State Bank
Connect. A technology shift from ''Point to Point'' to MPLS has been
initiated by Bank to ensure seamless best path connectivity at all the
branches with availability of redundant circuits at all times. Wifi /
Wimax / 3G and 4G modes of connectivity is also under consideration at
the Group level, after ensuring information security clearance of these
products in our Bank.

IV. ONLINE VOUCHER VIEWING AND VERIFICATION MODULE(OVVVM)

OVVVM has been implemented in the Bank at all branches/offices (other
than single officer branches). Same day transactions can be verified by
the supervisors after posting of the transactions in CBS. With the
viewing / verifying of transactions online on the same day, any fraud /
malpractices can come to notice on near real-time basis and adverse
position can be avoided to the extent possible.

12. MGNREGA E-PAYMENT

Government of Rajasthan has designated our Bank as the Nodal Bank for
MGNREGA e-Payments in the State of Rajasthan. MGNREGA e-Payment system
has been implemented for centralized payment of NREGA wages and other
expenditures directly to the beneficiaries'' accounts. The project has
been smoothly handling about 2 to 2.5 lakh transactions per month.

13. SMS UNHAPPY

The "Project SMS Unhappy" was launched by the Bank with the objective
to provide a simple and economical way to the customers to represent
their grievances. This has reduced complaint resolution time
drastically, to below 48 hours, thereby enhancing the customer
satisfaction level and creating a loyal customer pool.

14. INSTANT LOAN SANCTION

Bank is providing the facility of online instant sanction of Housing
Loan and Car loan to the customers under the head "Home Loan in 20
minutes" and "Car Loan in 10 minutes" respectively on Bank''s website
http: //www.sbbjbank.com.

The customer gets a sanction letter instantly on submitting completely
filled application form on Bank''s website, if he fulfills the
eligibility criteria.

15. ONLINE LOAN APPLICATION TRACKING SOFTWARE

Bank has introduced a web based application for Online Tracking of Loan
application for customer and status of their application can be viewed
by customer on internet through our Bank''s website.

16. INFORMATION SYSTEM (IS) SECURITY

With the efforts of the Bank to popularize IT enabled services, the
threats and risks to our IT assets have increased manifold. To control
these threats and risks our Bank has formulated a comprehensive IT and
Information Systems (IS) Security Policy that addresses all these
concerns, including maintenance of customers'' confidentiality, security
and integrity of data. State Bank''s Data Centre, where our CBS data
base resides (both at the Primary and Disaster Recovery Site), has
already acquired the accreditation from the International Standard for
Information Security Management Systems ISO/IEC: 27001: 2005. All the
Banking applications have built-in security features like access
control, data encryption and transmission through secured channels, as
per requirement of the application. The threat of ''virus'' and ''worms''
is minimized by having a centralized anti-virus solution.

Adequate Firewalls and Intrusion Detection Systems are in place, so as
to prevent unauthorized access to the network. The Disaster Recovery
Plan (DRP) and Business Continuity Plan (BCP) for all branches are in
place.

The Bank follows Reserve Bank of India/ Government of India guidelines
on Know Your Customer/ Anti Money Laundering / Combating Financing of
Terrorism. Prescribed documents relating to the identity and address
are obtained from customers while opening their accounts.

With the objective of Universal Financial Inclusion, Bank facilitates
opening of ''Small Account'' by migrant labourers, street hawkers and
other poorer sections of the society, with limited KYC documents.

To facilitate inclusion of lower strata of society to mainstream
banking, Basic Saving Bank Deposit Account (BSBA) for the customer
having prescribed KYC documents has been introduced. BSBA shall not
have the requirement of minimum balance. At the same time, the entire
range of services available to a normal saving bank account is extended
to this product.

In order to identify and examine suspicious transactions, the Bank has
installed the AMLOCK software besides setting up an Anti Money
Laundering Cell at the Head Office. The customers'' accounts have been
allocated different risk categories and alerts are generated once any
transaction exceeds a predefined threshold limit.

These alerts help in identification of suspicious transactions, which
are further reported to the Financial Intelligence Unit, Government of
India, in appropriate cases.

DEMAT SERVICES

Our Bank is providing Depository Participant Services with National
Securities Depository Limited (NSDL) to our customers, wherein they can
hold their securities as electronic book entries and transfer
securities, without actually handling physical scripts. Customers can
also obtain loans against Demat shares. SBBJ is registered with NSDL as
a Depository Participant.

CUSTOMER SERVICE:

Customer Service is a top priority for the Bank. We are in a service
industry and our success to a very large extent depends on the
satisfaction level of our customers. The environment we operate in is
increasingly becoming intensely competitive.

The meetings of the Customer Service Committee of the Board and
Standing Committee on Customer Service were convened at regular
intervals to review the position of customer service rendered. Similar
committees are also functioning at branches, Zonal Offices and Head
Office, which helps in continuous improvement in service standards.

The Bank is a member of the Banking Codes and Standards Board of India
(BCSBI) and has voluntarily adopted a ''Code of Bank''s Commitment to
Customers,'' which sets a framework for setting a minimum standard of
banking services to be provided by the banks. An awareness camp for
BCSBI code was organised at Jaipur on 19 November 2013 in coordination
with BCSBI.

CUSTOMER GRIEVANCES REDRESSAL MECHANISM:

The Bank has put in place a multi pronged grievances redressal
mechanism to suit varied customer requirements. An aggrieved customer
can either make a written complaint at branch / Regional / Zonal / Head
Office of the Bank or make an online submission in the form provided on
the Bank''s website / through e-mail against acknowledgement.

In terms of RBI circular DBOD.No.Leg BC.60/09.07.005/2006-07 dated
22.02.2007, the information in respect of customer complaints and
awards passed by the Banking Ombudsman is given in the Table below :-

A. Customer Complaints

(a) No. of Complaints 71
pending at the beginning of the year

(b) No. of Complaints 6470
received during the year(*)

(c) No. of Complaints 6434
redressed during the year(*)

(d) No. of Complaints 107
pending at the end of the year

(*) Excluding 1499 Complaints found non maintainable.

B. Awards passed by the Banking Ombudsman (BO)

(a) No. of unimplemented 01
Awards at the beginning of the year

(b) No. of Awards passed by 17**
the Banking Ombudsman during the year

(c) No. of Awards 12
implemented during the year

(d) No. of unimplemented 03
Awards at the end of
the year(in 2 cases Appeal has been made
before Appellate Authority and in 1 case
matter in under process)

** Out of the remaining 3 cases, under 1st case BO Delhi has
re-examined the case and cancelled the award against the Bank. In 2nd
case, the complainant not accepted the award and in another one, the
appeal allowed and award passed by BO is set aside by the Appellate
Authority.

ATM COMPLAINTS

To monitor the ATM failed transactions related customer complaints
received at the branches, ATM Complaints Reconciliation Cell has been
established at Head Office. Reserve Bank of India has prescribed that
all ATM related complaints be resolved within 7 working days. For
faster resolution /redressal of complaints, an online ATM Complaint
Management System (ATMCMS) has been developed and implemented. During
the year 2013-14, the Bank has received 20567 ATM failed transactions
related complaints, out of which 20477 complaints were resolved. No
home bank complaint (where customer and ATM both belong to our bank) is
pending for more than 7 working days. Number of complaints pending for
more than 7 days, where claim is pending with other banks, is 3.

THE RIGHT TO INFORMATION (RTI)

The Right to Information (RTI) Department was constituted at the Bank''s
Head Office in December, 2010 for better coordination and effective
implementation of the Right to Information Act, 2005 . The Department
has since then been instrumental in ensuring that information sought
for under the various RTI applications received by them is dispensed
with efficiently and effectively in a time bound manner as per the
provisions of the RTI Act, 2005 and that the appeals too, if received,
are redressed timely, while also complying with the directives of the
Hon''ble Central Information Commission (CIC) in this regard.

During financial year 2013-14, the RTI Department received 1553
applications under the RTI Act, 2005, out of which 1532 applications
were disposed off. 21 applications were awaiting disposal as on 31st
March, 2014, and these were all pending for less than 30 days.

Besides, the Department also received 73 appeals under the RTI Act,
2005 during financial 2013-14, out of which 71 appeals were disposed
off. 2 appeals were awaiting disposal as on 31st March, 2014, and
these also were pending for less than 30 days.

During the Financial Year 2013-14, the following developments took
place to make CPCs / initiatives more effective and to optimize gains:

- In Branch Cash Handling (IBCH) has been rolled out w.e.f.
15.06.2013.

- RASMECCC at Bhiwadi centre started functioning w.e.f. 31.01.2014.

- CAC at Delhi centre started functioning w.e.f. 26.02.2014. Shifting
of back office activities to loan CPCs, implementation of revised roles
for branch functionaries and better ambience in branches has not only
improved the Bank''s image but also helped the linked branches to focus
more on customer service and marketing for business.

CURRENCY MANAGEMENT DEPARTMENT

Owing to our Bank having the highest market share in Rajasthan, RBI has
designated our Bank''s 199 branches as Currency Chest branches in the
state and 15 Currency Chest branches in other parts of the country.
All our Currency Chest branches are undertaking the following
activities in an efficient manner:-

1. Circulation of New Currency Notes among Public.

2. Distribution of Coins to the Public.

3. Exchange of torn/damaged/ soiled/mutilated notes.

4. Providing of linkage facilities to branches of other banks which
are linked to them.

5. Our 9 branches are providing facilities of Note Exchange and coin
distribution on 3rd Sunday of every month and 6 branches are providing
facilities of Note Exchange and coin distribution on 3rd Sunday of
alternate month.

CROSS SELLING

The Bank continues to market life and non-life insurance, mutual fund
and credit card products in order to augment its non interest income.
For the purpose, the Bank has in place tie up arrangements with SBI
Life Insurance Co. Ltd., SBI General Insurance Co. Ltd., SBI Fund
Management Pvt. Ltd. and SBI Cards and Payments Services Pvt. Ltd.
Various campaigns were launched for marketing of these products, and
the bank earned a total income of Rs. 20.03 crore from cross selling
activities.

- Donated Generator to RamaKrishana Mission, Khetri for running various
welfare activities like health support programmes (free eye surgery)
and providing nutritious food for poor children and their mothers.

- Branches of the Bank Continues to adopt one girl child each from a
poor family with an objective of providing financial assistance for
pursuing their studies in Government /Municipal Schools.

Bank shall remain dedicated to respond to the needs of the less
fortunate and under- privileged members of the society and will also do
its bit for a clean environment.

BRANCH EXPANSION

During 2013-14, the Bank opened 113 new fully computerized branches
which includes 34 branches in unbanked rural centres in Tier V and VI.
25 branches were inaugurated online from the Head Office on 27.02.2014.

As on 31.03.2014, the total number of branches of the Bank stood at
1148, the category wise distribution thereof being as under:

Rural Semi Urban Metro Total
Urban

416 308 214 210 1148

The Bank continued to maintain its dominant presence amongst all other
banks in the State of Rajasthan with a network of 932 branches as on
31.03.2014, with 699 branches being located in rural and semi urban
areas.

The Bank continues to play a pivotal role in the socio-economic
development, alleviation of poverty and resultant overall uplift of the
masses in the State .

HUMAN RESOURCES DEVELOPMENT

The Bank''s staff strength as on 31.03.2014 was 13359 employees, with
the following break up: -

AS ON 31.03.2014 OUT OF WHICH

STAFF CADRE SC ST GENERAL TOTAL WOMEN MINORITY

OFFICERS 1058 489 3837 5384 695 368

CLERKS 936 584 3744 5264 918 317

SUB-STAFF 318 219 1418 1955 125 67

SAFAI 591 19 146 756 234 6
KARAMCHARI

TOTAL 2903 1311 9145 13359 1972 758

Out of the Bank''s total staff strength as on 31.03.2014, 2903 (21.73%)
belong to SC and 1311 ( 9.81%) to ST categories which is well above
required percentage. SC/ST cell to safeguard interests of SC/ST
employees is also well in place. Reservation policy is implemented in
our Bank as per Government guidelines.

Necessary complement of staff has been made available for working in
new frontiers like Core Banking Solution, Tele-banking, Internet
Banking, ATMs, Credit / Debit cards, marketing, Cross Selling, Business
Process Re-engineering etc. The Bank has been according high priority
to training and sensitization of staff members to respond to the
customers'' expectations and deliver modern banking facilities in the
technology- driven environment.

Human Resource is the most important constituent and quintessence of an
organization and its progressive development has now become a major
corporate concern. An organization should be able to bring in proper
integration of human resources management strategies with the business
strategies. Qualitative training for human resources has become
necessary for improvement of their efficiency. As most of the senior
functionaries / operational staff are going to retire in next 2-4
years, the Bank, has to develop a second line of expertise and enable
them to cater to the needs of its esteemed customers and the
Organization . Looking to these facts, a total no of 8981 employees of
all categories, including 787 employees of the sponsored RRBs, were
provided training opportunities on various subjects related to banking
and technology at all the three Staff Training Centres (STCs) of the
Bank during the year.

The Bank also provided pre-promotion training to 27 SC/ST Clerical
candidates, eligible for promotion to Officer Cadre Group A / B & 167
SC /ST Sub-Staff candidates eligible for promotion to Clerical Cadre
during the year. In addition to this, 37 seminars / workshops were
conducted on various burning issues to update skills of employees. More
thrust has been accorded to Mobile Banking, Internet banking, ATM
services, Soft skills, System & Procedures, Marketing, quality services
to the customers, in view of the ever changing customer needs. In this
direction we have also conducted 39 one day Motivational Programmes for
Clerks encompassing 1518 clerks.

Two HR Conclaves were conducted by us - The first one for the Top
Executives was held at Jaipur from 26.07.13 to 28.07.13, which was an
open discussion for continuous growth of our Bank, NPA management etc.
The second conclave was held at Udaipur from 29.11.13 to 30.11.13
wherein the target group was Controllers and was meant for team
building and leadership development / BPR initiatives / NPA management.

Apart from in-house training, the Bank has provided facility of
training to its officers in specialized areas at Apex Training
Institutes like State Bank Academy, Gurgaon, State Bank Staff College,
Hyderabad, SBIICM Hyderabad and SBIRD Hyderabad. During the said
period, 1308 officers have been trained at these external agencies in
different areas of Banking. For various other programmes, we have also
deputed our officers for training to IDBRT, NIBM-Pune, CAB- Pune and
FEDAI Mumbai.

During the financial year 2013-14, we deputed 10 officers for
specialized training programmes abroad viz : - 24th Annual Forex
Assembly of Forex Association of India at Dubai, Deutsche'' Bank
International Banking Seminar at New York, Seminar & Annual Meeting of
the IMF & World Bank Group at Washington,DC (USA), 12th Advanced
Management Programme towards Next Orbit :Indian Banking Sector at
Delhi, Paris, Milan and Berlin, Programme on Leadership Development for
Corporate Excellence in Collaboration with Kellogg School of Management
- North Western University, USA, 13th Advanced Management Programme
"Building Global Competitive Edge in the Banking Sector" held at Delhi,
Paris, Milan and Berlin.

Our "Gyanodaya" e-learning (anywhere, anytime learning) portal is in
full swing. Due to our efforts for increasing the number of
registrations by providing incentive of recognition and reward , a link
to access the portal from the intranet site and by making it mandatory
for newly promoted clerks/officers to pass at least 10/15 tests, the
number of registrations has increased to 3297 (27.03.2014) and is
increasing every day.

In the scheme of deputing top executives (GMs and DGMs) of the bank to
one training programme of their choice, at reputed external training
institutions, we deputed DGMs to IIM Ahmedabad and IIM Banglore. We
also conducted 05 training programmes in the specialized area of Credit
Management / SME Business / Analysis of Financial Statements /
Corporate Credit with the support of outside faculty.

ORGANISATIONAL PLANNING

For faster credit dispensation by bringing credit decision nearer to
business centres and customers as also to meet competition from other
banks, the Delegation of Powers of various Credit Committees were
revised and new credit committees (NWCC & RCC) were constituted to ease
pressure on the HOCC- II & ZOCC. The financing powers for allied &
general matters and advance related matters were also steamlined to
impart more effectiveness. The Delegation of Financial Powers up to
Scale -V was consolidated for ready reference to the staff. ATM Cell
Mumbai was rechristened as ATM Nodal Office, Mumbai and reallocated
under DGM (IT), in line with the other Associate Banks for sake of
uniformity. The Calendar of Reviews submitted to the Board/ ACB/ M.Com
was streamlined to impart more efficiency in the decision making
process.

STAFF WELFARE

The Bank believes in keeping the morale and motivation of the employees
high, considers employees as its most important assets and accords high
priority to their welfare.

The Bank undertook following staff welfare activities

1. Granting of Scholarship to the meritorious wards of the employees.

2. Providing free medical consultancy services at various hospitals.

3. Insurance cover for employees to the extent of Rs.8.00 lakh f 16.00
lakh for accidental death) under Group Insurance Scheme of SBI Life.

4. A total amount of Rs.3.00 lakh outstanding in various loan a/ cs
viz. Housing Loan, Overdraft limit (Personal loan), PF Loan, Conveyance
Loan is allowed to be waived for employees who die in harness .

5. A one-time award of Rs. 10,000/- for education to one ward of the
deceased employee is also given.

6. Reimbursement of funeral expenditure is being made to the extent of
Rs. 10,000/- from staff welfare fund for both serving and retired
employees.

7. Annual Health Check up scheme is extended to the spouse of the
employees who are within the age group of 41 to 49 years.

8. For employees who are on leave for debilitating sickness and are on
loss of pay, an amount of Rs. 15000/- per month (upto 24 months during
the entire service period) is paid.

9. The Bank has set up Holiday Homes at Jaisalmer, Chandigarh,
Mussoorie, Jaipur, Manali, Mumbai, Goa, Delhi, Haridwar, Katra,
Bengaluru, Mt. Abu, Vrindavan and Udaipur. This facility is also
available for retired employees.

10. Various cultural and sports activities were organized during the
year.

INDUSTRIAL RELATIONS

The Bank has a long history of harmonious and cordial relations with
both supervising as well as workmen employees enlisting their total
commitment, support and cooperation. The Employee''s Union and
Officers'' Association have extended their wholehearted cooperation for
the all-round growth of the Bank. A well established and on going
consultative machinery is functioning at various tiers of the
administration for resolving issues through joint consultations and
negotiations.

VIGILANCE ADMINISTRATION

Vigilance Administration is an integral part of the management.
Vigilance activities are accorded high priority in the Bank. Keeping in
view the paramount importance of the preventive vigilance, greater
emphasis is laid on the preventive measures. Preventive Vigilance
training programs have been conducted to improve skills of the staff.
In other training programs conducted at Bank''s Training Centres also,
areas with focus on "How to be a Vigilant Employee" and "Areas of
Concern from Vigilance Angle" are dealt with. The training platform of
the Bank has been effectively used to create awareness amongst all
officials about Vigilance function, areas of concern where officials
need to pay more attentions, nature of fraud/ serious irregularities
taking place, determination of vigilance angle and how bonafide actions
of the officials can be protected. The interaction and feedback from
the participants has been used to identify operational risk areas and
to suggest systematic improvement if any. Sensitization of officials on
Vigilance related issues was also done at various Zones. Preventive
Vigilance Committee set up has been revamped. Accordingly, branches
having staff of 10 or more, processing centers irrespective of staff
strength, unsatisfactory rated branches and fraud detected branches
have been included for formation of Preventive Vigilance Committee.
Meeting of Preventive Vigilance Committees are held regularly where
staff is sensitized towards preventive vigilance measures. Complaints
received in the Vigilance Department are dealt expeditiously and
investigations were conducted wherever needed. An independent Internal
Advisory Committee is functioning to examine all cases to decide
whether there is a Vigilance Angle. Significant emphasis is laid on the
transparency in the tendering process (procurement of goods and
services, auctions, etc.) by the Bank. The tenders issued by the Bank
are uploaded on the Bank''s website as well as Government of India
website.

An In-house magazine titled as "Vigilance Bulletin" is published every
quarter with an objective to create vigilance awareness amongst staff.
Many new initiatives have been taken as preventive measures like
Biometric login system, Electronic Voucher Verification, On line
Tracking of status of loan application by the applicant, better
pre-sanction due diligence process etc. Scheme of Recognition &
Alertness Award for staff in respect of detection / foiling of frauds
has been revamped and amount of incentive has been increased. Whistle
Blower Policy has been implemented in the Bank whereby any staff member
can provide information on any malpractices or instances of misuse of
official powers where the identity of informer will be protected

The department disposed of 440 complaints, 104 Investigations and 32
preventive vigilance inspections were conducted. 90 disciplinary cases
having vigilance angle have been concluded during the year 2013-14.

USE OF HINDI

The implementation of Official Language Policy in the Bank is not only
a statutory requirement but also a business need. The Bank made all
possible efforts to comply with the statutory provisions relating to
the Official Language Policy of the Govt. of India during the year and
took several initiatives to provide benefit of Bank''s different schemes
to the masses through Hindi Language.

During the year 2013-14, the Bank made significant progress in
promoting and propagating the use of Official Language and ensured
compliance of various other statutory requirements framed under the
Official Language Act /Official Language Rules. The Bank made all
possible efforts to achieve the targets set by Official Language Deptt.
Ministry of Home affairs, Govt. of India.

Bank continued its efforts to promote use of Hindi in the field of
information Technology. A portal of Rajbhasha Vibhag was made available
on Bank''s Infonet site. Various useful materials like Hindi typing
tool, format of Quarterly Progress Report, Annual Programme etc. were
made available on the portal. Officers/employees were imparted desk
training to work on computer in Hindi with the help of Unicode.

Hindi Day and Hindi-fortnight were celebrated in Offices/Branches of
the Bank in the month of September 2013 and various competitions were
conducted for the staff members. An All India Hindi Essay competition
was also conducted by the Head Office. To increase progressive use of
Hindi Head Office Rajbhasha Trophy competition (Head office and Zonal
level) was organized during the year. A Seminar was organised on 4th
March, 2014 for all Hindi officers/nominated Hindi officers of our
Bank.

Bank''s quarterly in House Rajbhasha magazine "Upwan" is being published
regularly. Since last two years this magazine had been awarded
consolation prize by Reserve Bank of India. During the year State Bank
of Bikaner and Jaipur has been awarded consolation Prize by RBI for the
progressive use of Hindi among Region "A".

State Bank of India, with the concurrence of the Reserve Bank of India,
approved the appointment of 5 firms of Chartered Accountants viz. M/s.
Agarwal Anil & Co. of Delhi, M/s. M K Aggarwal & Co. of Delhi, M/s.
Chaturvedi & Co. of Kolkata, M/s. Uberoi, Sood & Kapoor of Delhi and
M/s. P S D & Associates of Jaipur as the Statutory Central Auditors of
the Bank for the year 2013-14. During the period under review, the
scope of audit covered 664 branches / centralized processing units as
against 587 branches/centralized processing units covered in 2012- 13.

RESPONSIBILITY STATEMENT

The Board of Directors hereby states:

1. That in the preparation of the annual accounts, the applicable
Accounting Standards have been followed along with proper explanation
relating to material departures;

2. That they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent, so as to give a true and fair view of the state of affairs of
the Bank as on the 31st March 2014, and of the profit or loss of the
Bank for the year ended on that date;

3. That they have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Banking Regulation Act, 1949, and State Bank of India (Subsidiary
Banks) Act, 1959 for safeguarding the assets of the Bank and preventing
and detecting frauds and other irregularities; and

4. That they have prepared the annual accounts on a going concern
basis.

CORPORATE GOVERNANCE

The details on Corporate Governance are annexed.

ACKNOWLEDGMENT

The Board of Directors is grateful to its valued customers, esteemed
shareholders and the public at large for their patronage and confidence
reposed in the Bank and places on record its deep appreciation. The
Board of Directors thanks the Government of India, State Bank of India,
Reserve Bank of India and other regulatory agencies for their valuable
support and guidance throughout the year.

The Board of Directors places on record its deep appreciation of the
commitment, sense of involvement and dedication exhibited by each staff
member and constructive role played by the Employees'' Union and
Officers Association in the overall development, growth and prosperity
of the Bank.

For and on behalf of the Board of Directors

B. Sriram

Managing Director

Place : Mumbai

Date : 23rd April, 2014

Mar 31, 2012

The year 2011-12 has been a year of major turbulence in the global
economy triggered by the Euro Crisis, emanating from Greece, Ireland,
Portugal and Cyprus and spreading to Italy and Spain, impacting not
only Europe but the whole of the world and culminating into an overall
economic crisis. The year was replete with a mixed sense of optimism
and concerns. The optimism was attributed to a somewhat encouraging
'two speed' recovery in advanced and emerging economies, after a major
slump. As per World Bank study, Indian economy is expected to grow
faster than China. As inflation has emerged a major concern across the
border too, China has seen the back of its fiscal stimulus. China and
India have seen rapid growth and have helped push-up the global growth
rate.

FINANCIAL HIGHLIGHTS

NET INTEREST INCOME

The Bank's total interest income increased from Rs4796.48 crore during
2010-11 to Rs6291.36 crore during 2011-12, recording a growth of 31.17%.
Interest expenditure increased by 34.47% to Rs4069.96 crore, as against
Rs 3026.76 crore in the previous year. The net interest income recorded
a growth of 25.52% toRs2221.40 crore, as againstRs1769.72 crore in
2010-11. The net interest margin increased from 3.38% for the year
ended March 2011 to 3.70% for the year ended March 2012.

NON INTEREST INCOME

The non-interest income of the Bank declined by 6.37% from Rs639.70
crore in 2010-11 to Rs598.97 crore during 2011-12. The decline during
the year under review, as compared to the last year, is on account of
decrease of Rs28.30 crore in Government Commission, Rs38.64 crore in
profit on forex turnover, Rs12.59 crore in profit on sale of investments
and Rs4.72 crore in exchange/brokerage. However, other commission has
been increased by Rs44.90 crore.

OPERATING EXPENSES

The operating expenses recorded a growth of 4.85% from Rs1269.17 crore
in 2010-11 to Rs1330.76 crore during 2011-12. Of this, employee costs
decreased by 0.86% to Rs819.82 crore, while other operating expenditure
increased by 15.54% to Rs510.94 crore.

PROFIT

During 2011-12, the operating profit increased to Rs1489.61 crore,
recording a growth of 30.64% as against Rs1140.25 crore in the previous
year. The net profit recorded a growth of 18.36% from Rs550.88 crore in
2010-11 to Rs652.03 crore in 2011-12.

KEY FINANCIAL INDICATORS

The Return on Assets of the Bank stood at 0.99% during 2011-12 as
against 0.96% in the previous year. The return on equity decreased to
15.66% as against 19.32% in the previous year. The earnings per share
also decreased from Rs101.53 in 2010-11 to Rs95.05 in 2011-12, while the
book value per share improved from Rs570.16 in 2010-11 toRs594.98 in
2011-12. As at end-March 2012, the capital adequacy ratio of the Bank
stood at 12.81 % and 13.76% as per Basel I and II norms respectively,
as against 11.32% and 11.68% as per Basel I and II norms respectively,
as at end-March 2011. This was well above the RBI benchmark of 9%. Due
to rise in NPAs on account of continued stress faced by the industrial
sector coupled with agriculture NPAs, the Bank's Gross NPA ratio and
Net NPA ratio increased from 2.0% and 0.83% respectively as at
end-March 2011 to 3.30% and 1.92% respectively, as at end-March 2012.
The average business per employee increased to Rs827 lakh during
2011-12, as against Rs751 lakh in the previous year. The net profit per
employee improved to Rs5.42 lakh during 2011-12, compared toRs4.84 lakh
during 2010-11. The average business per branch increased to Rs104.73
crore during 2011-12, as against Rs94.72 crore in the previous year.

DIVIDEND

During the year 2011-12, the Bank declared an Interim Dividend of 145%
i.e. Rs14.50/- per equity share (face value of share Rs10 per share) as
against 164% i.e. Rs16.40 per share. Record date for ascertainment of
entitlement of shareholders for interim dividend was 27th March, 2012.
Interim dividend may be treated as Final dividend.

CREDIT MANAGEMENT

The overall credit demand remained buoyant during the FY 2011-12, in
line with the economic recovery. However, the Bank continued to focus
on qualitative credit growth and faster credit delivery with emphasis
on Agricultural sector, Small & Medium Enterprises (SMEs) and Large
Corporates with further emphasis on financing to infrastructure sector.
Total advances of the Bank grew by 19.74% during 2011-12, as against a
growth of 17.40% during 2010-11.

The Bank's Commercial & Institutional (C&I) segment advances (other
than food credit) registered a growth of Rs4,978 crore (23.44%), while
non-C&I segment comprising personal, small business and agriculture
advances increased by Rs3,205 crore (16.34%) during 2011-12. The impetus
of fnancing remained mainly towards infrastructure development, such as
power, road, ports and petroleum, besides other sectors such as steel,
textiles and non-banking finance companies.

During the year, the Bank sanctioned credit facilities aggregating
Rs9,430 crore to 122 high value new customers under C&I segment, besides
enhancing credit limits to the existing customers based on their
requirements. Centralized Processing Cell (CPC), set up at Head Office
for high value advances under Business Process Re-engineering
initiative of the Bank, continued to appraise/ assess the advance
proposals of high value promptly.

In view of the prevailing competitive market scenario, closer
interaction and regular meetings by the Top Management with high value
customers were held at major centres i.e. Delhi, Mumbai, Kolkata,
Hyderabad, Ahmedabad, Pune, Jaipur, Udaipur and Bhilwara.

PERSONAL BANKING

During 2011-12, personal segment deposits recorded a growth of Rs6,114
crore against the target of Rs9,000 crore, resulting in YOY growth of
20.69%. Deposit mobilization campaigns were launched for improving the
pace of acquiring new Savings Bank customers. One such campaign, namely
"AKAASH", was launched on 1st Sept 2011 to acquire 500000 new SB
accounts. During the year, the Bank opened a record number of 11.36
lakh new savings deposit accounts as against 9.83 lakh accounts in the
previous year. Bank is celebrating the Year 2012 as "Golden Jubilee
Year". To make this year memorable and growth oriented, a new product
named "SBBJ- 7STAR SAVINGS BANK ACCOUNT" has been launched. This
product has features aimed to attract High Net Worth, young and Tech
Savvy customers by bundling the 7 technology equipped products in the
account. Interest rates were also synchronized during the year in line
with the market scenario.

Consequent upon creation of Personal Banking Vertical, to energize the
personal banking streams of

Home Loan and Car Loan, Bank rolled out Home Loan & Car Loan centers,
headed by senior officers of the rank of Asstt General Manager and
Chief Manager respectively, as product specific special marketing units
at Head office during the year ended 31st March 2012. To leverage the
reoriented set up in the Personal segment department, 22 business
potential centres were identified and named as STAR centres, covering
248 branches of the Bank all over India.

During the year, to attract prospective customers and to take maximum
leverage of Technology, Bank started a unique initiative, first of its
kind in Indian Banking space for online sanction of Car Loans in 10
minutes and online sanction of Home Loans in 20 minutes. These links
are made available through our Bank's website, 'sbbjbank.com'. To cater
to the online loan applicants and to translate these applications into
business, Bank has put in place one 'Online Business Centre', which
tracks the status of these applications. To keep the pace with the
market trend, Bank has reoriented and modified existing schemes, such
as Home loan, Car loan and Personal Loan and extended concessions in
Interest rates, Processing fee and relaxed eligibility norms.

Despite the gloomy economic scenario coupled with rise in lending rates
and RBI's tightening liquidity norms, the Bank booked 1.09 lakh new
advances accounts and disbursed Rs2349.49 crore under various loan
schemes under the personal banking segment. Car loans and housing
loans recorded a growth of 25.51% and 8.50% respectively in 2011-12.
During the year, growth of personal segment advances moderated to
Rs692.36 crore (9.46%) as against Rs928.66 crore (14.53%) in the previous
year.

The Bank, at the behest of Ministry of HRD (MOHRD), Government of
India, implemented an Interest Subsidy Scheme for "Economically weaker
section (EWS) of Education loan borrowers" and "1% Interest Subvention
scheme for Housing loan borrowers having loan amount of Rs10/15 lac and
project cost Rs20/25 lac" through RBI. Subsidy of Rs6.24 crore in 5815
accounts claimed and received in Education loan accounts of EWS
category and subvention of Rs1.20 crore in 6151 accounts was claimed and
received in home loan accounts.

PRIORITY SECTOR LENDING

Priority sector advances continued to remain the major thrust area of
the Bank's operations. As at end- March 2012, the Bank's priority
sector advances increased to a level of Rs17689.96 crore as against
Rs15111.85 crore in the previous year. This constituted 42.38% of the
Adjusted Net Bank Credit, which was above the RBI benchmark of 40%.
Priority sector advances in Rajasthan stood higher at 62.76% of
Rajasthan's ANBC.

AGRICULTURE

Lending to agriculture remains one of the major thrust areas of the
Bank. The flow of credit to agriculture by way of disbursement
increased from Rs4,636 crore in 2010-11 to Rs6,825 crore in 2011-12,
recording a growth of 47.22%. The outstanding level of agriculture
advances increased by 23.46% from Rs7,316 crore as at the end March,
2011 to Rs9,032 crore as at end of March, 2012.

Agriculture credit constituted 21.64% of the Adjusted Net Bank Credit,
which was above the RBI benchmark of 18%. In the state of Rajasthan,
the agricultural advances stood even higher at 36.75% of the Adjusted
Net Bank Credit.

The Bank issued 128271 Kisan Credit Cards (KCCs) with sanctioned amount
of Rs1,880 crore during the financial year, taking the total number of
KCCs to 461913 as at end-March 2012. The Bank has added 172 new farmers
per rural and semi-urban branch during the year.

In order to bring the farmers out of the clutches of the money lenders,
the Bank introduced a Debt Swap Scheme in the year 2008. During
2011-12, assistance disbursed under the Debt Swap Scheme stood at
Rs84.15 crore, benefiting 20912 farmers. The outstanding assistance
under the scheme increased from Rs242.83 crore as at end-March 2011 to
Rs291.42 crore as at end-March 2012. The number of beneficiaries under
the Scheme also increased from 57153 in the previous year to 70377
farmers in March 2012, recording a growth of 23.13%. By providing
financial assistance under this scheme, Bank has made the villagers of
42 villages completely free from the clutches of private money lenders.

FINANCIAL INCLUSION

Financial Inclusion aims to extend hassle free savings, loans and other
services at an affordable cost to the under privileged and unbanked
population living in remote villages. Our Bank has embarked upon its
journey to implement the FI initiatives in the unbanked service area
villages through ICT enabled banking correspondent outlets. 830
villages with population of 2000 and above have been allocated to our
Bank for providing banking services by 31.03.2012. 796 business
Correspondents have been engaged to cover 825 villages and in the
remaining 5 villages brick and mortar branches have been opened.
195927 accounts have been enrolled and 63525 Smart Cards have been
issued to the customers. Presently Savings Bank product is offered to
the customers in FI villages and other products such as remittances,
insurance etc. will be offered gradually in due course.

FINANCIAL LITERACY

Bank is actively involved in Govt. of India sponsored Swabhimaan
campaign enlightening the rural populace about FI initiatives.
Pamphlets, brochures detailing the advantages of Saving Bank accounts
are distributed in FI villages to educate the rural public about the
Bank's FI initiatives. Our Bank has already set up Financial Literacy &
Credit Counseling Centres (FLCCs) in all the nine Lead Districts to
impart literacy among rural population. These FLCCs have conducted 163
literacy camps and counseled 19197 persons during the year 2011-12.
Apart from this, the Bank has also set up 8 Rural Self Employment and
Training Institutes (R-SETIs) to train the potential Small
Entrepreneurs to start their own ventures / business / entrepreneur for
self employment in rural areas. The 8 Rural Self Employment and
Training Institutes (R-SETIs) have so far trained 19198 rural
unemployed youth for various trades i.e. electric work, tailoring
computer repair etc. Out of 19198 trained persons, 10029 persons
belong to BPL families.

AADHAAR PROJECT OF UIDAI

UIDAI has been setup by the Government of India with a mandate to issue
a unique identification number to all the residents in the country
based on demographic and biometric data of the individual. UIDAI has
entered into partnership with the Govt. and other agencies including
Banks leveraging their existing infrastructure. These agencies are
called the Registrars of UIDAI. Our Bank has also signed an MoU with
UIDAI on 22nd January 2011 and has become a registrar in this project.
During the first phase of Aadhaar enrollment up to 31.03.2012, 2.05 lac
residents have been enrolled by our Bank as against target of 2.00 lac
set by UIDAI.

MICRO, SMALL AND MEDIUM ENTERpRISES (MSMES)

The main growth driver of the Indian economy, MSME sector accounts for
45% of manufacturing sector output, 40% of India's exports and provides
employment to more than 7.32 crore persons in 3.12 crore enterprises.
Accordingly, the Bank has also been according high priority to this
area.

With the help of renewed emphasis on fnancing this sector, the
outstanding credit to MSME sector increased by 28.02% from Rs6,238 crore
as at the end-March 2011 to Rs7985.81 crore as at the end- March 2012.
As against the target of 3030 new MSME accounts (5 new accounts per
urban/semi-urban branch), the Bank has assisted 25481 new MSME units
during the year 2011- 12. In order to boost MSME advances, the Bank has
launched 3 campaigns extending concessions in processing
charges/up-front fee and relaxation in the interest rates during the
year 2011-12.

As at end-March 2012, the outstanding assistance to Micro and Small
enterprises has increased by 32.80% to reach a level of Rs6477.96 crore,
as against Rs4877.63 crore as at end-March 2011.

The Bank has continued its thrust to provide collateral free loans to
MSME units under the credit guarantee scheme of CGTMSE. During the
year, Bank provided new collateral free loans under Credit Guarantee
scheme of CGTMSE to MSE units amounting to Rs48.22 crore, taking the
level of these loans to Rs211.09 crore to 12344 units as at end-March
2012.

LOANS TO WOMEN BENEfICIARIES

As at end-March 2012, 1.91 lakh women have benefited from financial
assistance under different schemes of the Bank with a total outstanding
of Rs2290.10 crore, equivalent to 5.49% of the Adjusted Net Bank Credit,
which is above the 5% benchmark prescribed by RBI.

The programmes for minorities' welfare envisage a fair deal to the
minority communities in terms of opportunities for employment and
socio-economic upliftment. As at end-March 2012, assistance to these
communities stood at Rs920.59 crore spread over 64926 accounts.

Financing to weaker sections stood at Rs6918.29 crore benefiting 7.64
lakh persons as at end-March 2012. The ratio of assistance to weaker
sections as a percentage of Adjusted Net Bank Credit is 16.57% as at
end-March 2012. This was above the benchmark of 10% prescribed by RBI.

Advances under the Differential Interest Rate (DIR) scheme stood at
Rs29.94 crore benefiting 31906 persons which is at 0.07% of total
advances outstanding at the end of previous year i.e 31.03.2011, as
against the prescribed benchmark of 1%. The Bank has disbursed 10131
new loans under DIR scheme with credit limits of Rs14.54 crore during
the year.

GOVERNMENT BUSINESS

The Bank conducts Government Business on behalf of State/ Central
Government departments through 483 authorized branches. Income Tax,
Central Excise, Service Tax, Value added tax etc. are collected through
physical challans as also through the electronic mode. The Bank has
established a Centralized Pension Processing Centre (CPPC) which
calculates as well as credits pension to the accounts of pensioners
across all the branches.

During the year, Bank has also established "Online Treasury branch" for
online salary payment of Rajasthan State Government employees,
Commercial Tax Department refunds, MNREGS wages payment etc. During
2011-12, Bank's earning under the head 'Commission Income from
Government Business' amounts to Rs147.30 crore.

INTERNATIONAL BANkING

The Bank provides Foreign Exchange related services to exporters/
importers, other resident and non- resident customers through a network
of 73 Authorized Category "B" and 182 category 'C branches. Bank's
forex dealing rooms at Mumbai and Kolkata and authorized category 'B'
branches are equipped with latest technology for real-time
communication and connected through SWIFT with more than 725 offices of
foreign banks throughout the world. The Bank maintains 20 NOSTRO
accounts in all major currencies and non-account correspondent banking
relationship with all major banking groups in the world. To facilitate
NRI customers for inward remittances, there is online remittance
facility and tie-ups with 7 Gulf based Exchange Houses. Western Union
Money Transfer Payment services are also being provided at 231 of our
branches. The Bank also undertakes proprietary Forex trading to
increase profit by taking advantage of market movements.

During 2011-12, the Bank's forex merchant turnover increased by Rs2,853
crore to Rs19,652 crore, as against Rs16,799 crore in the previous year.
The NRI Deposits increased by 18.30% to Rs950 crore at the year- end
2012, as against Rs803 crore of end-March 2011. The export credit stood
at Rs1931.40 crore with a slight increase of 2.19% from the previous
year.

The Bank chairs the local chapter of Foreign Exchange Dealers'
Association of India (FEDAI). The Bank is an active member of FEDAI,
International Chamber of Commerce (ICC) and Clearing Corporation of
India Limited (CCIL).

INDUSTRIAL REhABILITATION

Rehabilitation/restructuring of potentially viable industrial units
remains an important thrust area of the Bank. For this purpose, the
Bank has its own Industrial Rehabilitation Policy containing detailed
guidelines for undertaking rehabilitation/ revival package and the same
is updated from time to time. Whenever units are found non-viable or
not responding to the rehabilitation/ restructuring package, focus is
shifted to recovery of Bank's dues through legal recourse, action under
SARFAESI, compromise settlement or assignment of debt.

As at end-March 2012, the Bank had 25 large sick /weak units on its
books with aggregate outstanding of Rs310.26 crores. There are 19
Corporate Debt Restructuring cases with aggregate exposure of Rs468.18
crores and 23 BIFR cases with exposure of Rs304.94 crores. The Bank has
been acting as BIFR's Operating Agency in 6 cases. During the year
under review, 2 accounts with a total exposure of Rs45.33 crores have
been restructured under CDR mechanism as warranted by global economic
meltdown. Sustained efforts undertaken by the Bank in restructuring
the accounts and post-sanction close monitoring and follow up resulted
in maintaining most of the assets as standard.

NPA MANAGEMENT

The Bank continues with its multipronged strategy of controlling
Non-Performing Assets (NPAs) through intensive monitoring of large
value accounts, close follow-up with DRT/ BIFR, restructuring of viable
accounts and effectively utilizing the remedies available under the
SARFAESI Act. Besides, the Bank resorted to outright sale of
unproductive assets to Assets Reconstruction Companies in the public
and private sector on cash basis. Due emphasis has been given to follow
up with the courts and fling of Execution Petitions. During the year,
'Recovery Camps' were organized for NPA recovery, the results of which
are quite encouraging. The progress is being monitored at the highest
level. The progress in NPA/ AUCA recovery is discussed/reviewed by the
Management Committee by conducting Video-conferencing with all the
Zones and DGM headed branches. To contain the growth of NPAs, MIS data
have been extensively used. The accounts in SMA/ Probable NPA category
are discussed through video-conferencing with a view to regularise the
position and not to allow any account to slip to NPA. The level of
SMA/Probable NPA are also brought down by removing technical snags. A
'Loan Tracking Center' has been established to monitor and track the
irregular standard accounts from Head Office level. Pre-emptive
measures, such as restructuring etc., are also taken as per recent RBI
guidelines. By adopting the above measures and utilizing the provisions
of SARFAESI Act effectively, Bank has received good number of
acceptable compromise proposals which resulted in good recovery in NPA.
There has been an addition of Rs1571.92 crore in NPAs during the current
financial year due to Global recessionary trend. However, there has
been recovery/ up-gradation to the tune of Rs480.77 crore. The Gross NPA
ratio stood at 3.30% and the Net NPA ratio of the Bank stood at 1.92%
as at the end of the financial year 2011-12.

RISk MANAGEMENT STRUCTURE Of THE BANk

The Bank has an independent Risk Management Framework in place. At the
apex level, there is a Risk Management Committee of the Board (RMCB),
which oversees the policies and strategies for Risk Management in the
Bank. Credit Risk Management Committee (CRMC), Asset Liability
Management Committee (ALCO), Market Risk Management Committee (MRMC)
and Operational Risk Management Committee (ORMC) have been constituted
to support RMCB. These sub-committees are submitting all critical
issues/ development in their respective areas to RMCB. The Bank has
Credit, Market and Operational Risks Management Policies for
identification, measurement and management of major risks, the Bank is
exposed to. These policies have been reviewed and updated from time to
time, keeping in view the dynamic business environment. The Integrated
Risk Management Department headed by a DGM, at the Head Office, acts as
the nodal centre for coordination with other departments/operating
units engaged in managing risk in their respective business areas.

CAPITAL FRAMEWORK

Under Pillar-I of the New Capital Adequacy Framework (NCAF) guidelines
issued by Reserve Bank of India, the Bank is computing Capital to Risk
Weighted Assets Ratio (CRAR) using Standardized Approach for Credit
Risk, Standardized Duration Approach for Market Risk and Basic
Indicator Approach for Operational Risk. Under Pillar-II of NCAF, the
Bank has assessed capital requirement for 2011-12 for other risks in
its Internal Capital Adequacy Assessment Process (ICAAP) document
submitted to RBI. Basel-II Disclosures have been made by the Bank in
the Annual Report as also on Bank's website as part of the Pillar-III
guidelines of NCAF.

CREDIT RISk

Control and monitoring of credit risk is dealt with as per the
Board-approved Credit Risk Management, Credit Risk Mitigation &
Collateral Management Policy and Loan policy of the Bank. Credit Risk
management remains a major task for Bank and receives prime attention.
The above policies cover methodologies for measuring, monitoring and
control of credit risk. In order to control the magnitude of credit
risk, prudential norms or benchmarks, financing ratios, single borrower
or borrower-group exposure, industry-specific and sector-specific
exposure, exposure to sensitive sectors, hurdle rate etc. have been set
up. Credit appraisal systems and a clearly defined delegation of powers
form an integral part of the Credit Risk Management process.

MARKET RISK

To monitor market risks and treasury operations, mid-offices (domestic
& forex) are functioning at IRMD. To assess resilience of Investment
portfolio, Scenario Analysis on market risk covering events such as
decline in stock markets, rise in bond yields and foreign exchange rate
movements are conducted regularly as per the Stress Testing Policy of
the Bank.

OPERATIONAL RISk

One of the major tools for managing operational risk is to put in place
a well established internal control system, which includes segregation
of duties, clear management reporting lines and adequate operating
procedures. Most of the operational risk events are associated with
weak links in internal control systems or laxity in complying with the
existing internal control procedures. The Bank has developed suitable
systems and procedures for managing and control of operational risks.

Bank has decided to move over to advanced approaches of Basel- II
guidelines for Credit, Market and Operational Risks. Under advanced
approaches, Internal Rating Based (IRB) Approach will be followed for
Credit Risk, Internal Models Approach (IMA) for Market Risk and
Advanced Measurement Approach (AMA) for Operational Risk.

In order to improve the quality of capital and address liquidity risk
issues, Reserve Bank of India has issued draft guidelines on
implementation of Basel-III Capital Regulations in India to be
implemented in phases with effect from 1st January 2013. Bank has made
a preliminary assessment of the impact of the guidelines and shall draw
plans for smooth transition to Basel-III regime once the final
guidelines are issued.

ASSET LIABILITY MANAGEMENT

A comprehensive Asset Liability Management (ALM) System is in place for
effective management of market risk covering Liquidity Risk, Interest
Rate Risk and Foreign Exchange Risk. Liquidity and Interest Rate Risks
are assessed and monitored through Structural Liquidity Report and
Traditional Gap Analysis respectively. The structural liquidity report
is being prepared and reviewed on a daily basis as per RBI guidelines.
Both the risks on Foreign Assets & Liabilities are being monitored
through Maturity & Positions (MAP) and Sensitivity to Interest Rate
(SIR) statements. The monitoring of liquidity on a dynamic basis, over
a time horizon spanning 1-90 days, is in place. Duration Gap Analysis
is also used to manage interest rate risk for the entire balance sheet.

The Asset Liability Management Policy coupled with Investment Policy of
the Bank specifies various prudential limits for management of
Liquidity and Interest Rate Risks. The Bank is regularly monitoring
these limits. A comprehensive Contingency Funding Plan and a system of
daily monitoring of inflows & outflows of deposits are in place for
managing Liquidity on a day-to-day basis. Calculation of Value at Risk
(VaR) on Foreign Exchange Forward Positions and Stress Testing on
Liquidity, Interest rate and Foreign Exchange Open & Forwards Positions
is also undertaken.

As per RBI guidelines, the Bank has migrated to the Base Rate regime
w.e.f. 01 July, 2010 for new loan accounts except those exempted by
RBI. Loan accounts sanctioned prior to 01.07.2010 continue to be
governed by the BPLR system until the next renewal/reset date or
earlier, if the individual borrowers decide to switchover to Base Rate
regime.

INTERNAL CONTROL, INSpECTION AND AUDIT

The Bank has in place a well- established independent audit system and
structure to ensure adequate internal control for safe and sound
operations. Internal Audit is carried out under Risk Focused Internal
Audit (RFIA) as envisaged under Risk Based Supervision of RBI with
focus on assessment of risk and internal control mechanism.

The branches have been categorized into three groups as per risk
perception and are subject to varying degrees of audit. During 2011-12,
684 branches and 54 Cells under Business Process Re-engineering (BPR)
initiatives have been subjected to internal audit. No branch of the
Bank remained overdue for audit as on 31.03.2012. 103 branches and 35
BPR initiatives covering 66.01% of advances including non-fund based
business and 40.57% of deposits have been placed under continuous
surveillance through concurrent audit. Besides, 13 Head Office
Departments are also subjected to concurrent audit system. IS Audit
cell is in place to conduct IS audit of major IT establishments
including Core Banking project, Zonal Computer Centers, etc. in
accordance with RBI directives and Bank's IT Security Policy.

In order to have better and uniform evaluation of risk factors, besides
saving substantial working days, the Bank has introduced a "Cluster
Audit Approach" in Delhi, Kota and Kolkata centres during 2011-12.
Under this approach, simultaneous audit of BPR entities and its linked
branches were conducted.

As at end-March, 2012, 99.88% of total branches of the Bank was rated
"Well Controlled" and "Adequately Controlled".

RECONCILIATION OF INTER-OFFICE TRANSACTIONS

As per RBI guidelines, all entries need to be reconciled within a
period of six months from the date of their origin. By end-March 2012,
the Bank had reconciled all inter- office debit transactions originated
upto 29.02.2012 i.e. well before the time limit prescribed. The Bank is
committed to perform better than the target set by RBI and shall aim at
reconciling all entries within two months of their origin.

INFORMATION TECHNOLOGY

CORE BANkING SOLUTION (CBS)

All branches of the Bank are running successfully on Core Banking
Solution. We were able to provide better customer satisfaction by
tendering many Value Added Services like: multi functional ATMs,
Internet Banking, fexi-deposit scheme, multi-city cheque facility,
instant credit of local and outstation cheques, introduction of
RTGS/NEFT and SBGRPT for faster settlement of funds etc.

MOBILE BANkING

Bank has introduced Mobile Banking facility for its customers having a
Savings/Current Account. The product is named "State Bank Freedom".
Presently, there is an upper ceiling of Rs50,000 for fund transfer and
for purchase of goods/services per day within overall calendar month
limit of Rs2, 50,000.

INTERBANK MOBILE PAYMENT SERVICES (IMPS)

"Interbank Mobile Payment Service" (IMPS) has been launched enabling
Bank's customers to use mobile instruments as a channel for remitting
funds or to make various utility payments at shops and commercial
establishments, making payment just with the MMID (Mobile Money
Identifier) of the beneficiary in secure manner on 24 X 7 basis. The
upper ceiling for remittance or payment of bills is same as in Mobile
Banking facility.

AUTOMATED TELLER MACHINES (ATMS)

The Bank has installed 80 new networked ATMs during the year to take
the tally of ATMs to 1082. All the ATMs are connected to the network
of State Bank Group ATMs, thereby enabling more than 42.71 lac
cardholders of the Bank to have access to over 26000 ATMs of the State
Bank Group all over the country. Our customers can also access ATMs of
other Banks free of charge upto fve transactions per month, including
balance enquiry as transaction, subject to a maximum of Rs10,000 per
transaction.

INTERNET BANKING

All branches of the Bank are enabled to offer Internet Banking facility
to the retail as well as the corporate customers. Looking to the rapid
increase in the usage of Internet banking worldwide, the Bank has
introduced several new features during the year. Apart from
transferring funds from their account to another account in our Bank,
our customers can now transfer amount from their account to any other
account in any bank (through RTGS/NEFT), make TDS enquiry for Term
Deposits from the comfort of their homes or offices, open/close of
e-TDR/e-STDR/e-Recurring Deposit (RD) account, and view the details of
Income-Tax deposited (26-AS). Transaction rights with single ID up to
Rs5.00 lac per day per user for small Corporate customers, named 'CINB
Saral', has been provided. Retail Internet Banking facility for
visually challenged persons has also been made available. For Corporate
customers, a new facility 'I-Collect', for on line collection of funds
has been provided.

Online payment of direct and indirect taxes have been enabled in our
Internet banking. Bank's customers can now pay Income Tax, Service Tax,
Excise Duty, Customs Duty of Central Government, Value Added Tax (VAT)
and Central Sales Tax (CST) of Rajasthan State Government and
Maharashtra State Government as also Professional Tax of Maharashtra
State Government online. Facility of online application for IPOs
through Bank's internet banking portal www.sbbjonline.com with ASBA
(Application Supported with Blocked Amount) facility, where investor
customer continue to earn interest during the application process, is
available to users.

Facility of online booking of Railway/ Air Tickets has been widely
accepted. Electronic payment of railway freight (E-Freight) is gaining
popularity; now four Corporate customers are using the facility. Bank
has integrated two more Aggregator to its online system to increase the
range of merchants and utility billers to Bank's Internet Banking
users. Customers can now make payment to 1200 plus merchants/billers.
Steps have been taken by the Bank to further increase the
merchants/billers list.

Bank launches a campaign to promote retail Internet Banking by
initiating actions to increase awareness about Internet Banking among
staff as well as customers. It has conducted seminars at Zonal/Regional
offices and branches. Interaction with staff of Corporates and
Institutions were also held. Meetings with Corporate customers were
organized to popularize Corporate Internet Banking and facility of
"Zero Balance Internet Current Account" for online tax payment.

ELECTRONIC PAYMENT SYSTEMS:

USAGE Of RTGS, NEFT & SBGRPT

Real Time Gross Settlement (RTGS) is an integrated payment and
settlement system and National Electronic Fund Transfer (NEFT) is a
scheme for inter- bank funds transfer operated by the RBI. Bank has
taken several measures to increase usage of RTGS and NEFT system. All
branches of the Bank are RTGS and NEFT enabled. Customers can make
their inter-bank remittances in a faster and secure manner at a very
nominal cost, to any RTGS/ NEFT enabled branch of other banks in India.
State Bank Group Payment (SBGRPT) functionality for electronic funds
transfer within State Bank Group is also available for customers.

SMS UNHAPPY

A new service "Project SMS Unhappy" has been launched during the year
2011 -12 with the objective of providing a simple and economical way to
the customers to convey their grievances and reduce complaint
resolution time drastically, to below 48 hours, thereby enhancing the
customer satisfaction level and creating a loyal customer pool.

GREEN CHANNEL COUNTER

Bank has implemented "Green Channel Counter" facility at 250 branches
including all district Head Quarter branches in Rajasthan and all
branches situated in Delhi NCR, Mumbai, Bangalore and Ahmedabad during
the year 2011 - 12. It is a paperless, eco- friendly and easy facility
which would enable customers to pre-process selected transactions in a
branch. This is being carried out by using a Transaction Processing
Device (TPD) placed at a Single Window Operator's (SWO) terminal and
linked with the desktop of the SWO and integrated with the CBS
application. This TPD acts as a transaction pre-processing device,
which is used by customers to enter data for a particular transaction
authenticated by the four digit PIN provided for the ATM-cum-Debit
Card. The facility provides safety and comfort to the customers by
avoiding filling up of withdrawal forms / cheques / pay in slips and
quicker service.

INFORMATION TECHNOLOGY (IT) SECURITY

As the level of usage of IT enabled services has increased, the threats
and risks to our IT assets have also increased manifold. To control
these threats and risks, the Bank has a comprehensive IT and
Information Systems (IS) Security Policy that addresses all these
concerns including maintenance of customers' confidentiality, security
and integrity of data. State Bank's data centre, where Bank's CBS data
base resides (both at the Primary and Disaster Recovery Site), has
acquired the accreditation for the international standard for
Information Security Management Systems ISO/IEC: 27001: 2005. All the
Banking applications have built-in security features like access
control, data encryption and transmission through secured channels as
per requirement of the application. The threat of virus and worms is
minimized by having a centralized anti-virus solution. Adequate
Firewalls and Intrusion Detection Systems are in place so as to prevent
unauthorized access to the network. The security of the network is
being managed by Network Management Consultants of the Bank. The
Disaster Recovery Plan (DRP) and Business Continuity Plan (BCP) for all
branches are in place.

In order to identify and examine suspicious transactions, the Bank has
installed the AMLOCK software, besides setting up an Anti Money
Laundering Cell at Bank's Head Office. The customers' accounts have
been divided into different risk categories. Alerts are generated once
any transaction exceeds a predefined threshold limit. These alerts help
in identification of suspicious transactions, which are further
reported to Financial Intelligence Unit, Government of India, in
appropriate cases.

CUSTOMER SERVICE

Customer Service continues to remain a prime focus of attention for the
Bank. Leveraging core banking technology, providing value added
services and re- designing key business processes, in line with the
requirements of customers, is an ongoing process in the Bank aimed at
improvement in Customer Service on a continuous basis.

The meetings of the Customer Service Committee of the Board and
Standing Committee on Customer Service were convened at regular
intervals to review the position of customer service rendered. Similar
Committees are also functioning at Branches, Zones and Head Office,
which help in continuous improvement in service standards.

The Bank has put in place a multi pronged grievances redressal
mechanism to suit varied customer requirements. An aggrieved customer
can either make a written complaint at branch / regional / zonal / head
office of the Bank or make an online submission in the form provided on
the Bank's website / through e-mail against acknowledgement.

During the year, the Bank has launched an initiative code-named
'Mission Five', encompassing 5 voluntary initiatives to be undertaken
by the branches for maintaining cleanliness of premises, punctuality of
staff members, serving customers with a smile, thanking its customers
by name and promptly resolving their complaints.

The Bank is a member of the Banking Codes and Standards Board of India
(BCSBI) and has voluntarily adopted a 'Code of Bank's Commitment to
Customers,' which sets a framework for setting a minimum standard of
banking services to be provided by the banks.

DISCLOSURE Of COMPLAINTS/ UNIMPLEMENTED AWARD Of BANKING OMBUDSMEN

In terms of RBI circular DBOD.No.Leg BC.60/09.07.005/2006-07 dated
22.02.2007, the information in respect of customer complaints and
awards passed by the Banking Ombudsmen is given in the Table below :-

* Appeal allowed and award passed by BO set aside by the Appellate
Authority.

ATM COMPLAINTS

To monitor the ATM failed-transactions related customer complaints
received at the branches, ATM complaints Reconciliation Cell has been
established at Head Office. Reserve Bank of India has prescribed that
all ATM complaints to be resolved within 7 working days. For faster
resolution /redressal of complaints, an online ATM Complaint Management
System (ATMCMS) has been developed, through which we are able to adhere
to RBI Guidelines. During the year 2011- 12, the Bank has received
45408 ATM failed-transactions related complaints, out of which 44905
complaints were resolved. No home-bank complaint (where customer and
ATM both belong to our bank) is pending for more than 7 working days,
since 01-04-2010.

THE RIGHT TO INFORMATION (RTI)

The Right to Information (RTI) Department, constituted at the Bank's
Head Office for better coordination and effective implementation of the
Right to Information Act, 2005, has been instrumental in ensuring that
information sought for, under the various RTI applications received by
them, is dispensed with efficiently and effectively in a time bound
manner as per the provisions of the Act and that the appeals too, if
received, are redressed timely.

During the current year ended 31.03.2012, the RTI Department received
1466 applications under the RTI Act, 2005, out of which, 1434
applications were disposed. Only 32 applications, all less than a month
old were awaiting disposal as on 31.03.2012.

Besides, the Bank had also received 64 appeals upto 31.03.2012 under
the RTI Act, 2005, out of which 62 appeals have been disposed off by
the Appellate Authority by 31.03.2012.

BUSINESS PROCESS RE- ENGINEERING

During FY 2011-12, Business Process Re-engineering (BPR) Initiatives
further stabilized in Bank and their coverage extended to more
branches. Bank operates 12 city-centric loan CPCs, viz. Retail Assets
Central Processing Centre (RACPC), Small & Medium Enterprises City
Credit Centre (SMECCC) and Retail Assets and Small & Medium Enterprises
City Credit Cell (RASMECCC) in end-state at 11 centres with 228
branches linked to them, as against 223 branches linked as on
31.03.2011. During the year, RASMECCC & SARC were combined at Ajmer,
Bhilwara, Bikaner, Jodhpur, Kolkata, Kota, Mumbai, Sriganganagar and
Udaipur (where number of linked branches is < 20) for faster and cost
effective processing. Similarly, coverage of Rural CPC went up to 255
branches as on 31.03.2012, as against 235 branches at the end of
previous year. Number of Relationship Managers (Medium Enterprises)
increased to 17 at 13 major business centres compared to 14 RMMEs at 11
centres at the end of previous year.

During FY 11-12, the following developments took place to make CPCs /
initiatives more effective and to optimize gains and obviate staff &
space costs:

(a) Upon creation of business verticals at HO, the ownership &
responsibility for stimulating and tracking the performance of CPCs and
initiatives was assigned to respective vertical heads.

(b) Personal Loans and Car Loans were delinked from loan CPCs / MPST
and their sourcing, sanction, disbursement and maintenance vested with
the respective linked branches w.e.f. 14.11.2011. This shifting was
necessitated due to branches enjoying area-specific car dealers
linkages (for car loans) and for ease of interface with customers
having salary accounts (for personal loans).

(c) MPSTs at 10 major centres, viz. Ajmer, Bhilwara, Bikaner, Delhi,
Jaipur, Jodhpur, Kota, Mumbai, Sriganganagar and Udaipur became leaner
and re-oriented towards sourcing one or combination of Home Loans, MSME
loans and Corporate Salary Package, in most productive manner.

Coverage of various CPCs / initiatives as on 31.03.2012 vis-Ã -vis
31.03.2011 was as under :

CPC / Initiative Branches Covered

31.03.2011 31.03.2012

LCPC 377 486

CPPC 754 792

CAC 129 136

Clg. CPC 197 206

TFCPC 99 116

RM-PB 16 16

Branch Re-design 145 159

(v) Shifting of back office activities to loan CPCs, implementation of
revised roles for branch functionaries and better ambience in branches
at core BPR centres not only improved the Bank's image but also helped
the linked branches to focus more on customer service. BPR initiatives
in the Bank are set to improve the quality of service and market share
in business by leveraging technological changes. Efforts are being made
by the Bank to back various CPCs with advanced work-flow software aimed
at further improving quality, flexibility and productivity.

CURRENCY MANAGEMENT

RBI has designated 200 branches as Currency Chest branches in the State
and 16 branches in other parts of our Country. All the Currency Chest
branches are undertaking the following activities in an efficient
manner:

(i) Circulation of New Currency Notes among public.

(ii) Distribution of coins to the public.

(iii) Exchange of torn /damaged/ soiled / mutilated notes.

(iv) Providing linkage facilities to branches of other banks which are
linked to them.

(v) 16 branches are providing facilities of note exchange and coins
distribution on 3rd Sunday of every month.

CROSS SELLING

In order to augment non-interest income, the Bank has continued
marketing of life and non-life insurance, mutual funds and credit card
products. For the purpose, the Bank has in place tie up arrangements
with SBI Life Insurance Co. Ltd., National Insurance Co. Ltd., SBI
Mutual Fund, Birla Sunlife Mutual Funds and SBI Cards & Payments
Services Pvt. Ltd. During 2011-12, the Bank launched campaigns for
marketing of these products which helped in getting a total income of
Rs17.32 crores from cross selling activities.

APPLICATION SUPPORTED BY BLOCkED AMOUNT (ASBA)

In order to impart greater efficiency in public issuance, a
supplementary process of applying in Public Issues as well as to right
issues had been introduced by the SEBI viz. Applications Supported by
Blocked Amount (ASBA). The Bank, being registered as Bankers to an
issue, had been authorized by SEBI as Self Certified Syndicate Bank,
eligible to accept applications under the ASBA process. During the year
2011-12, the Bank has designated 2 more branches under the ASBA
process. Thus, the Bank has so far designated 17 branches, which can
accept these applications. Besides, customers of all branches of the
Bank can apply in the public/right issues under the ASBA process,
through Internet Banking. During the year, the Bank has also started
work of Syndicate ASBA and 4 branches has been designated under this
process. During the period under review, 22207 applications
aggregating Rs230.42 crore were processed by 17 designated branches of
the Bank. The Bank earned a commission of Rs0.31 crore in the process.

COMMUNITY SERVICES BANKING

As a responsible Corporate Citizen, the Bank continues to undertake
community based social activities such as tree plantation, free medical
camps, blood donation camps, establishing water-huts, sports
competition etc. During 2011-12, the Bank provided Ambulances to "Kota
Cancer Society", Kota and "Ashadham Ashram", Udaipur each for the
treatment of Cancer Patients and other regular patients who are
under-priviledged members of the society. One mortuary van was also
given to "Shree Amrapur Jankalyan Charitable Trust", Jaipur. Every
branch of the Bank adopted one girl child each from poor families with
an objective of providing financial assistance for pursuing studies in
Govt./Municipal schools. The Bank provided financial assistance to two
schools, which are imparting education to the children of
poor/down-trodden families of the Society for purchase of computers,
furniture, peripherals etc. To help visually challenged children, one
braille printer and a laptop were provided to Rajasthan Netraheen
Kalyan Sangh. Blankets / quilts /sweaters were distributed to the needy
people in another initative. The Bank also honoured the meritorious
students of the state with cash reward.

GOVERNMENT SPONSORED SCHEMES

Laying utmost emphasis on Government sponsored schemes has been amongst
the major endeavors of the Bank in pursuit of financial inclusion. The
Bank continued to play a pioneering role in fnancing entrepreneurs
under various Government sponsored schemes during the year 2011-12. The
position under various Government sponsored schemes as at end-March
2012 is as under: -

Scheme Number of Amount
Beneficiaries sanctioned
during
financial
year
(Rs. crore)

Swarn Jayanti 2103 9.09

Shahri Rojgar

Yojana (SJSRY)

Prime Ministers 348 12.86

Employment

Generation

Programme

(PMEGP)

Swarn Jayanti

Gram Swarojgar 4386 47.59

Yojna (SGSY)

Artisan Credit HOOH , no
1281 4.08
Card Scheme

LEAD BANK SCHEME

The Bank has Lead Bank responsibility in nine Districts in the State of
Rajasthan viz. Bikaner, Barmer, Hanumangarh, Jaisalmer, Jalore, Pali,
Sirohi, Rajsamand and Udaipur. The Bank has been implementing and
monitoring the Annual Credit Plan and other developmental and poverty
eradication schemes launched by Govt. of India, Govt. of Rajasthan and
NABARD. Target allotted for Annual Credit Plan to our Bank for the year
2011-12 was Rs2,014 crore, against which achievement of our Bank, has
been Rs2,574 crore, recording 128% of target.

MICRO CREDIT

At the end of March 2012, the Bank has credit linked a total of 41349
Self Help Groups with disbursement of Rs265.89 crore, out of which 34444
accounts are of women beneficiaries with disbursement of Rs178.37 crore.
NABARD has ranked the Bank as number one in Rajasthan State for its
performance under Micro Credit continuously from the year 2004- 05 to
2008-09. In the year 2009-10, the Bank has secured first position in
Rajasthan for Micro Credit as per "Status of Micro Finance in India
2009-10" published by NABARD.

Recently, the Ministry of Finance, Govt. of India launched a project
for fnancing Women Self Help Groups with the support of Anchor, a NGO
as SHPI in 24 backward Districts of 24 States in the country. In
Rajasthan, Barmer district, which is Bank's Lead District has been
selected for this purpose.

RURAL SELF EMPLOYMENT TRAINING INSTITUTES (RSETI)

In order to impart job-oriented skills to rural unemployed youth, the
Bank has set-up seven RSETIs at Bikaner, Hanumangarh, Barmer,
Jaisalmer, Jalore, Sirohi and Nathdwara (Distt. Rajsamand). The Bank
has also set up a Skill & Entrepreneurship Development Institute (SEDI)
at Jaitaran, Distt. Pali in association with Ambuja Cement Foundation.

By March 2012, 19198 candidates have been imparted training for a range
of jobs, which are locally in demand, in these institutions. With the
help of this training, 3609 candidates have been engaged in various
jobs and 8429 candidates have started their own ventures.

FINANCIAL LITERACY AND CREDIT COUNSELLING CENTRES (FLCC)

In order to educate farmers and other people in rural / urban areas
with regard to various financial products, different Bank schemes and
services available from the formal financial sector, the Bank has set
up 9 Financial Literacy and Credit Counseling Centres (FLCC) in all the
nine Lead Districts of Bank in Rajasthan. These FLCCs are providing
awareness service free of charge. Upto 31/03/2012, 19197 persons have
been counseled by these centres.

REGIONAL RURAL BANk

MGB Gramin Bank, the Regional Rural Bank (RRB) sponsored by the Bank,
has a network of 222 branches spread over six districts viz. Pali,
Jalore, Sirohi, Sriganganagar, Hanumangarh and Bikaner of Rajasthan.
The Bank continues to provide managerial support and financial
assistance by way of refinance etc. to MGB Gramin Bank. All branches of
MGB Gramin Bank are working on CBS platform. As at end-March 2012, MGB
Gramin Bank had deposits of Rs2253.12crore, advances of Rs1852.62 crore
and recorded a profit before tax of Rs42.50 crore during 2011-12.

BRANCH EXPANSION

During 2011-12, the Bank opened 48 new fully computerized branches. As
at end-March 2012, the total number of branches stood at 950,
comprising 946 business branches, 2 asset recovery branches and 2
treasury branches. Of these, there are 335 rural branches, 271
semi-urban branches, 167 urban branches and 177 metro branches. The
number of branches in Rajasthan increased to 791 which are the largest
among all banks. Out of these, 599 branches are located in rural and
semi-urban areas, which play an important role in rural development and
poverty alleviation in the State.

HUMAN RESOURCES DEVELOPMENT

The Bank's staff strength as on 31.03.2012 was 12866 employees, with
the following break up: -

AS ON 31.03.2012 OUT OF WHICH

STAFF CADRE SC ST GENERAL TOTAL WOMEN MINORITY

OFFICERS 914 451 3319 4684 340 77

CLERKS 865 493 3669 5027 825 62

SUB-STAFF 412 262 1693 2367 133 27

SAFAI
KARMCHARI 641 21 126 788 16 2

TOTAL 2832 1227 8807 12866 1314 168

Out of the Bank's total staff strength as on 31.03.2012, 2832 (22.01%)
belong to SC and 1227 (9.54%) to ST category. During 2011-12 while 195
members of clerical staff have been promoted as officers, 12 officers,
1269 clerks and 378 guards cum peons have been recruited.

The percentage of SC/ST employees to the total employees at 31.55% is
much above the benchmark stipulated by the Govt. of India. The
reservation policy of the Govt. is being implemented scrupulously in
the Bank.

The Bank believes that its human resources are the most important
assets and their development is necessary for growth of the Bank. In
the dynamic business environment, it is necessary that adequate
training and sensitization is provided to the staff members on an
on-going basis to meet the challenges in the wake of globalization of
economies introduction of new concepts in management areas as also of
advanced technologies in day to day activities. With this aim in mind,
Bank has imparted training to 6347 employees which includes 3490
officers, 2326 clerks and 531 sub-staff during the year under review.

A total of 6443 employees of all categories, including 96 employees of
sponsored RRBs, were provided training opportunities on various
subjects related to banking and technology at three STCs of the Bank
during the year. The Bank also provided pre recruitment training to 983
SC/ST candidates appearing in the written test for recruitment of
clerical cadre and officer cadre during the year. In addition to this
31 seminars / workshops were conducted on various contemporary issues
to update the skills of employees. We have also conducted special
training programmes to all newly promoted officers up-to cadre MMGS-III
and all Branch Managers during the current fnancial year.

With a view to facilitating improved supervision, organisational
effecti- veness and customer services, 2 branches were reallocated
during 2011 -12 from Region - IV (Chandigarh) to Region - I in the
Delhi Zone. Fraud Risk Management functions were put under supervision
of Asstt General Manager (Scale-V) to strengthen the system. A
position of Asstt General Manager (Scale-V) was also created for better
co-ordination with SBI for Contact Centre. In view of several changes
that have taken place in IT department, it was restructured for synergy
in ABs and 2 posts of Asstt General Manager (special cadre) were
created. As BPR initiatives are established and working smoothly, the
position of Asstt General Manager (BPR) and Asstt General Manager SARC,
Mumbai were de- categorized. RASMECCCs and SARCs have been merged.
Keeping in view the importance of work handled by RAMECCCs and SARCs,
the positions of the heads of RAMECCC & SARC at Bhilwara and
Sriganganagar were upgraded as Asstt General Managers.

With a view to improving the control mechanism, over-all efficiency as
also the rate of business growth re-structuring of Head Office was made
whereas separate business verticals were created. Ownership of each
business vertical have been vested with a General Manager. For better
performance Demat services & E-trading cell was shifted from Tilak
Marg, Jaipur branch to Head Office and placed under control of the DGM
(P&SB).

Delegation of powers for relaxation in prescribed rates/ceiling or
deviations in hospitalization scheme for staff was revised.

STAFF WELfARE

The Bank believes in keeping the morale and motivation of the employees
high, considers employees as its most important assets and accords high
priority to their welfare. The Bank undertook staff welfare activities
like granting scholarship to the meritorious wards of the employees,
providing free medical consultancy services at various hospitals etc.
Insurance cover for employees has been raised from Rs7.00 lac to Rs8.00
lac (Rs14.00 lac to Rs16.00 lac for accidental death) w.e.f. 01.03.2012
under group insurance scheme of SBI Life. Waiver of housing loan of the
deceased employees has been extended to cover overdraft limit (Personal
loan), PF loan and conveyance loan upto Rs3.00 lac. Special award of
Rs10,000 for education (one time payment) to one ward of the deceased
employee has been approved. Reimbursement of funeral expenditure is
being made to the extent of Rs10,000 from staff welfare fund. Annual
Health Check-up scheme extended to the spouse of the employees (age of
employee between 41 to 49 years). Besides, relief to the employees, who
are on leave without pay on sickness grounds, has been enhanced from
Rs7,500 upto 18 months to Rs15,000 upto 24 months during the entire
service period. The Bank has set up holiday homes at Jaisalmer,
Chandigarh, Mussoorie, Jaipur, Manali, Mumbai, Goa, Delhi, Haridwar,
Katra, Bengaluru and Udaipur. Various cultural and sports activities
were also organized during the year.

INDUSTRIAL RELATIONS

The Bank has for long been maintaining harmonious and cordial relations
with both supervising as well as workmen employees. The Employees'
Union and Officers' Association have extended their wholehearted
cooperation for the all-round growth of the Bank. A well established
and consultative mechanism is in place in the Bank for resolution of
various issued emerging from time to time.

VIGILANCE ADMINISTRATION

The object of vigilance activity in Bank is to enhance the level of
managerial efficiency and effectiveness in the organization. As
risk-taking forms an integral part of banking business, every loss
caused to the organization, either in pecuniary or non-pecuniary terms,
needs to be distinctly divided into a business loss which has arisen as
a consequence of a bonafide commercial decision and an extraordinary
loss which has occurred due to any malafide, motivated or reckless
performance of duties. While the former has to be accepted as a normal
part of business and ignored from the vigilance point of view, the
latter has to be viewed seriously and dealt with under the extant
disciplinary procedures. In order to minimize the impact of latter, the
Vigilance Department constantly practices preventive vigilance, apart
from extant surveillance system in the Bank. The punitive vigilance
measures are applied while dealing with the complaints and frauds
having vigilance angle.

The preventive vigilance comprises the dissemination of knowledge and
precautions, to be exercised by the operating staff while discharging
their duties. During the year, Bank has conducted seven preventive
vigilance training programmes at various training centers, where 187
participants were benefited. Meetings of preventive vigilance
committees in big branches are arranged, where staff is sensitized in
regard to the preventive vigilance measures. The Vigilance department
of Bank has disposed off 57 complaints during the year. 52
investigations have been initiated after 01.04.2011 and total 36 cases
of investigations have been disposed off during the period. 48
preventive vigilance inspections were conducted during the period. The
constant supervision of the cases resulted into disposal off 122
vigilance cases, during the period. The Bank celebrated 'Vigilance
Awareness Week' in the month of November 2011, as per CVC's guidelines.
In order to bring about vigilance awareness amongst the Bank staff, a
quarterly in-house magazine titled as "Vigilance Bulletin" is also
being published.

USE Of HINDI

The Official Language Implementation Committee at Head Office held
8-meetings during the year to discuss the progressive use of Hindi in
the Bank. 881 branches / offices of the Bank have been notified under
rule 10 (4) of the Official Language Rules 1976. Out of these, 702
branches / offices are specified under rule 8(4), which constitute
79.68% of total notified branches / offices of the Bank.

Section 3(3) of Official Language Act 1963 is being meticulously
followed in the Bank. Facility of Hindi version has also been made
available in the Core Banking Software. In compliance to the order of
the Hon'ble President of India ,"Unicode" System has been implemented
in the Bank and all the ATM's are operated in bilingual / trilingual
manner.

'Hindi Fortnight' was observed

during September 1 to 14, 2011 during which, various competitions were
held and prizes awarded to the winners. To impart the knowledge of
Official Language Policy and job oriented Hindi, 27 workshops /training
programmes were organized. During the year, 871 branches / offices were
inspected for implementation of the Official Language. To increase
progressive use of Hindi, Head Office Raj Bhasha Trophy competition was
organized during the year.

Representatives of the Government of India visited Bank's Head Office
to review the position and appreciated the efforts made in the
implementation of the Of

Mar 31, 2011

The Board of Directors of State Bank of Bikaner and Jaipur have
pleasure in presenting this Annual Report together with the audited
Balance Sheet and Profit and Loss Account of the Bank for the year
ended 31st March 2011.

State Bank of India, with the concurrence of the Reserve Bank of India,
approved the appointment of six firms of Chartered Accountants viz. M/s
Vyas & Vyas of Mumbai, M/s S.C.J. Associates of Agra, M/s S.L. Chhajed
& Co. of Bhopal, M/s L.U. Krishnan & Co. of Chennai, M/s B. Khosla &
Co. of Jaipur, and M/s S. Daga & Co. of Hyderabad as the Banks
Statutory Central Auditors for the year 2010-11. The scope of audit
covered 844 branches/ central processing cells as against 829 branches/
central processing cells covered in 2009-10.

RESPONSIBILITY STATEMENT

The Board of Directors hereby states:

i. that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;

ii. that they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Bank as on the 31st March 2011, and of the profit or loss of the
Bank for the year ended on that date;

iii. that they have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Banking Regulation Act, 1949, and State Bank of India
(Subsidiary Banks) Act, 1959 for safeguarding the assets of the Bank
and preventing and detecting frauds and other irregularities; and

iv. that they have prepared the annual accounts on a going concern
basis.

CORPORATE GOVERNANCE

The Details on Corporate Governance are annexed.

ACKNOWLEDGMENTS

The Board of Directors is grateful to the valued customers, esteemed
shareholders and the public at large for their patronage and confidence
reposed in the Bank and places on record its deep appreciation. The
Board of Directors thanks the Government of India, State Bank of India,
Reserve Bank of India and other regulatory agencies for their valuable
support and guidance throughout the year.

The Board of Directors places on record its deep appreciation of the
commitment, sense of involvement and dedication exhibited by each staff
member and constructive role played by the Employees Union and
Officers Association in the overall development, growth and prosperity
of the Bank.

For and on behalf of the Board of Directors

Mumbai Shiva Kumar

Dtd.28.04.2011 Managing Director

Mar 31, 2010

FINANCIAL HIGHLIGHTS

NET INTEREST INCOME

The Banks gross interest income increased from Rs.3810.28 crore during
2008-09 to Rs.3977.22 crore during 2009-10, recording a growth of 4.4%.
Interest expenditure increased by 2.2% to Rs.2765.69 crore, as against
Rs. 2707.06 crore in the previous year. The net interest income
recorded a growth of 9.8% from Rs.1103.22 crore in 2008-09 to
Rs.1211.53 crore during 2009-10. Due to higher decline in yield on
advances relative to cost of deposits, the net interest margin declined
from 2.81 % in 2008-09 to 2.70% in 2009-10

N0N INTEREST INCOME

The non-interest income of the Bank recorded a growth of 1.0%from
Rs.577.05 crore in 2008-09 to Rs.582.67 crore during 2009-10. The
growth was lower on account of 67.2% decline in profit on foreign
exchange transactions from Rs.69.74 crore in 2008-09 to Rs.22.88 crore
in 2009-10. The Government Commission income and profit on sales of
investments recorded a growth of 15.0% and 20.9% respectively during
the year under review.

OPERATING EXPENSES

During 2009-10, the operating expenditure increased to Rs.890.47 crore,
recording a growth of 13.1 % from Rs.787.43 crore during 2008-09. Of
this, employee costs increased by 8.9% to Rs.501.82 crore, while other
operating expenditure increased by 19.0% to Rs.388.65 crore.

PROFIT

The operating profit of the Bank increased to Rs.903.73 crore during
2009-10, recording a growth of 1.2% compared to Rs.892.84 crore in the
previous year. The net profit recorded a growth of 12.8% from Rs.403.45
crore in 2008-09 to Rs.455.16 crore in 2009-10.

KEY FINANCIAL INDICATORS

The return on assets improved to 0.93% during 2009-10 as against 0.92%
in the previous year. The return on equity stood at 18.83% as against
19.71% in the previous year. The earnings per share increased from
Rs.80.69 in 2008-09 to Rs.91.03 in 2009-10 while the book value per
share improved from Rs.409.29 in 2008-09 to Rs.483.48 in 2009-10. As at
end-March 2010, the capital adequacy ratio of the Bank stood at 11.94%
and 13.30% as per Basel I and II norms, respectively as against 13.18%
and 14.52% as per Basel I and II norms, respectively as at end-March
2009. This was well above the RBI benchmark of 9%. Due to rise in NPAs
on account of continued stress faced by the industrial sector, the
Banks Gross NPA ratio increased from 1.63% as at end-March 2009 to
1.72% as at end-March 2010 while Net NPA ratio improved from 0.85% to
0.77%. The average business per employee increased to Rs.628 lakh
during 2009-10 as against Rs.555 lakh in the previous year. The net
profit per employee improved to Rs.3.96 lakh during 2009-10, compared
to Rs.3.55 lakh during 2008-09. The average business per branch
increased to Rs.83.89 crore during 2009-10, as against Rs.74.34 crore
in the previous year.

DIVIDEND

The Bank has declared a dividend of 144% (Rs. 14.40 per share of face
value Rs.10) for the year 2009-10, which is higher than the dividend of
120% paid for the year 2008-09.

CREDIT MANAGEMENT

The overall credit demand remained subdued during the first three
quarters of 2009-10 and signs of improved growth became more evident
during the fourth quarter. While the Bank continued to target large
corporates for qualitative volume growth, the thrust of the year
remained on retail advances particularly agriculture, personal segment
and Micro, Small & Medium Enterprises (MSMEs).

The Banks retail advances comprising

personal segment, small business and agriculture advances increased by
Rs.2,798 crore, registering a growth of 19.9% which was better than the
growth of 8.7% recorded in the previous year. The Commercial &
Institutional (C&l) segment advances (other than food credit)
registered a growth of Rs.3,066 crore i.e. 20.4%, compared to the
growth of 27,5% in the previous year. Under the C&l segment, the Bank
continued to lay emphasis on financing infrastructure projects
including power and road, besides steel, cement, textiles and
construction sectors.

In order to further improve the turn- around time for credit delivery,
a Centralized Processing Cell (CPC) has been set up during 2009-10 for
high value advances on the lines of similar initiatives for retail
advances under the Business Process Re-engineering initiatives.
Further, the Project Finance Cell set up at the Head Office in July
2008, continued focused attention on appraisal of projects involving
cost upto Rs. 100 crore. A total of 35 projects, with an outlay of
Rs.2,092 crore were appraised by the Cell during the year. The CPC
sanctioned credit facilities aggregating Rs.6,390 crore to high value
new customers under the C&l/ mid-corporate segment besides increasing
credit limits of the existing customers based on assessment. In view of
slowdown in demand, a total of 28 large accounts were re-structured
upto 31 -03-2010 involving an exposure of Rs. 1,097 crore.

REPLACING HIGH COST BULK DEPOSITS

In line with the efforts initiated in the previous year, the Bank
continued to replace high cost bulk deposits by a relatively more
stable personal segment deposits. The ratio of high cost (over card
rate) bulk deposits and Certificates of Deposits to total deposits,
which was brought down from 29.5% in end-March 2008 to 18.4% as at
end-March 2009, declined further to 14.2% as at end- March 2010.

PERSONAL BANKING

The growth in personal segment deposits during 2009-10 stood at
Rs.4,585 crore (22.7%) which was better than the Banks overall deposit
growth of 17.4%. in order to increase new customer acquisition, special
campaigns were launched for opening of savings and current accounts
with the Bank. During the year, the Bank opened 9.66 lakh new savings
accounts including 1.53 lakh no-frills accounts (Saral Bachat Khata)
launched for the purpose of financial inclusion.

With aggressive marketing, the personal segment advances recorded a
growth of Rs.956 crore (17.6%), which was better than the growth of
Rs.563 crore (11.4%) recorded in the previous year. The Bank launched
an "Interest Subsidy Scheme for Housing the Urban Poor" and "Pension
Plus Loan" schemes during the year. Besides, existing schemes such as
car, housing, education, mortgage, two-wheeler, rent- plus, gold loan
and personal loan schemes were modified in view of the market dynamics.
"My Home Loan" and "Easy Car Loan" campaigns were also launched during
the year. With special efforts, outstanding car loans and housing loans
recorded a growth of 75.2% and 18.1%, respectively during 2009-10, as
against a growth of 53.8% and 8.9% respectively in the previous year.
During the year the Bank booked around 1.29 lakh new advances accounts
and disbursed Rs.2,497 crore under various loan schemes under the
personal banking segment.

PRIORITY SECTOR LENDING

Priority sector advances remain a major thrust area of the Banks
operations. As at end-March 2010, the Banks priority sector advances
increased to a level of Rs. 13,560 crore, as against Rs.11,758 crore in
the previous year. This constituted 45.06% of the Adjusted Net Bank
Credit, which was above the RBI benchmark of 40%. Priority sector
advances in Rajasthan stood higher at 70.77%.

AGRICULTURE

The Bank accords high priority towards lending to agricultural sector.
The flow of credit to agriculture increased from Rs.2,855 crore in
2008-09 to Rs.3,315 crore in 2009-10, recording a growth of 16.1%. The
outstanding level of advances to agriculture, including the amount
receivable from Government on account of Agriculture Debt Waiver
Scheme, increased by 18.7%, from Rs.5,134 crore as at end-March 2009 to
Rs.6,092 crore as at end-March 2010. Agriculture credit (including
investments in RIDF) constituted 20.35% of the Adjusted Net Bank
Credit, which was above the RBI benchmark of 18.0%. In the State of
Rajasthan, the agricultural advances stood even higher at 38.27% of the
Adjusted Net Bank Credit. As against the stipulated target of adding
100 new farmers on an average by each rural and semi-urban branch, the
Bank added 191 new farmers per rural and semi-urban branch during the
year. The Bank issued 1.35 lakh Kisan Credit Cards (KCCs) during the
year, taking the total number of KCCs to 6.98 lakh as at end-March
2010.

In order to bring the farmers out of the clutches of the money lenders,
the Bank had introduced a Debt Swap Scheme in the previous year. During
2009-10, assistance disbursed under the Debt Swap Scheme stood at
Rs.71.52 crore benefiting 17,273 farmers. The outstanding assistance
under the Scheme more than doubled from Rs.65.69 crore as at end-March
2009 to Rs. 134.67 crore as at end-March 2010. The number of
beneficiaries under the Scheme also increased from 17,127 in the
previous year to 33,376 farmers in March 2010, recording a growth of
94.9%.

Under Agriculture Debt Waiver and Debt Relief Scheme, 2008, the focus
has now shifted towards maximizing the recovery in respect of cases
where the 25% relief is to be provided subject to recovery of balance
amount within the stated period. A special scheme of One- Time
Settlement (OTS within OTS) was launched by the Bank during the year so
as to provide some additional relief to the distressed farmers. Out of
the total recoverable amount of Rs.636 crore under this category, an
amount of Rs.557 crore (87.6%) has been recovered up to end-March 2010.
In the Union Budget 2010-11, the Government of India has extended the
due date of repayment by these farmers from December 31, 2009 to June
30, 2010, which has provided some more time to the Bank for recovery of
these dues.

FINANCIAL INCLUSION

Following successful implementation of financial inclusion in 6
districts of Rajasthan, the Bank has commenced IT-enabled Financial
Inclusion scheme viz.SBBJ Tiny which entails opening of no-frills
accounts and providing biometrically enabled smart cards to population
living in the unbanked areas of the State. Initially, the scheme covers
savings account facility, but gradually other products like recurring
deposits, fixed deposits, investments, insurance, remittances, loans,
etc. are proposed to be added in a phased manner. The technology
platform for the same has been finalized during the year 2009-10
conforming to the Open Standards for Smart Card Based Financial
Inclusion solutions prescribed by Indian Banks Association and
Institute for Development and Research in Banking Technology (IDRBT).

In line with RBI / Government of India directives, the Bank is expected
to provide banking facilities in the identified 906 villages of
Rajasthan having a population of over 2000 each, with the help of
biometrically configured smart cards and by engaging business
correspondents, by March 2011. During 2009-10, the Bank commenced the
pilot phase of financial inclusion initiatives in three villages viz.
Boore Khurd in Alwar District, Ranchorpur in Udaipur District and
Bhairwa in Jaisalmer District and opened 450 smart card based
no-frills savings accounts. With the help of experience gained, the
Bank plans to open 3 lakh such accounts during 2010-11.

FINANCIAL LITERACY AND CREDIT COUNSELLING CENTRES

The Bank believes that the financial education is an integral part of
financial inclusion. Accordingly, in order to educate farmers and other
people in rural/ urban areas with regard to various financial products
and services available from the formal financial sector, the Bank plans
to set up Financial Literacy and Credit Counselling Centres (FLCCs) in
9 districts of Rajasthan where the Bank has the lead bank
responsibility. These FLCCs are expected to become operational during
2010-11 and such services would be provided free of charge.

MICROCREDIT

In another initiative in the pursuit of financial inclusion, the Bank
has been consistently ranked number one in credit linking Self Help
Groups in the State since 2004-05. As at end-March 2010, the Bank has
credit linked a total of 27,019 Self Help Groups with disbursements of
Rs.142.32 crore, out of which 24,580 accounts are of women
beneficiaries with disbursements of Rs. 122.63 crore.

MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs)

The main growth driver of the Indian economy, MSME sector accounts for
45% of manufacturing sector output, 40% of Indias exports and provides
employment to about 6 crore persons spread over 2.6 crore enterprises.

With the help of renewed emphasis on financing this sector, the
outstanding credit to MSME sector increased by 46.8% from Rs.4,015
crore as at end- March 2009 to Rs.5,896 crore as at end- March 2010.
This includes retail trade advances amounting to Rs.803 crore, which
were included in the definition of MSME sector by Government of India
during the year 2009-10. As against the target of doubling the credit
flow to SME sector between 2005-06 and 2009-10 in terms of the policy
package of Government of India, the Bank has tripled the credit flow to
this sector during the five year period.

As at end-March 2010 the outstanding assistance to micro and small
enterprises increased by 50.5% to reach a level of Rs.4,652 crore, as
against Rs.3,092 crore as at end-March 2009. As against the target of
financing 2805 new SME accounts (5 new accounts per urban/ semi-urban
branch), the Bank has assisted 25,730 new MSME units during the year
2009-10. Since August 2008, the MSME units have been facing major
constraints on account of slowdown of demand from domestic and export
sectors. In order to help these units, the Bank has continued providing
relief and concessions, including relaxation in the lending rates, so
as to enable them to revert to the growth trajectory at the earliest.
The benefit of SME Help Scheme was extended to the new customers during
the year. Besides, in order to benefit the small borrowers, the maximum
eligible loan under Laghu Udyami Credit Card (LUCC) scheme was
increased from Rs. 10 lakh to Rs.20 lakh during the year.

The Bank attaches high importance to providing collateral free loans to
Micro

and Small Enterprises (MSEs) under the Credit Guarantee Scheme of
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
During the year, the Bank provided new collateral free loans under the
Credit Guarantee scheme to 5,080 MSEs amounting to Rs.70.34 crore,
taking the level of these loans to Rs.105.56 crore to 8,403 units as at
end-March 2010.

GOVERNMENT SPONSORED SCHEMES

Providing assistance to entrepreneurs under the Government sponsored
schemes has been one of the key strategies of the Bank in pursuit of
financial inclusion. The position under various Government sponsored
schemes as at end-March 2010 is as under:-

Scheme Number of Amount
Beneficiaries sanctioned
during the
financial
year
(Rs. crore)

Prime Ministers 836 44.43
Employment .

Generation
Programme
(PMEGP)

Swarn Jayanti 22079 43.83
Gram Swarojgar
Yojana (SGSY)

Swarn Jayanti 4403 13.11
Shahri Rojgar
Yojana (SJSRY)

LOANS TO WOMEN BENEFICIARIES

As at end-March 2010,1.61 lakh women have benefited from financial
assistance under different schemes of the Bank with total outstanding
of Rs.1628.29 crore, equivalent to 5.41 % of the Adjusted Net

Bank Credit, which is above the 5% benchmark prescribed by RBI.

GOVERNMENT BUSINESS

The Bank conducts Government business on behalf of the State/ Central
Government departments through the authorised branches. Collection of
income tax, central excise, service tax, value added tax, etc. is also
done through the electronic mode. The Bank has established a
Centralized Pension Processing Centre (CPPC) which calculates as well
as credits the accounts of pensioners across all the branches. During
2009-10, commission income from Government business increased by 15.0%
to Rs. 150.87 crore, as against Rs.131.19 crore in the previous year.

INTERNATIONAL BANKING

The Bank has a wide network of 73 Authorized Category B branches and
180 Category C branches, equipped with the state of the art technology
to cater to the needs of exporters, importers and Non-Resident Indians
(NRIs). The Bank maintains 20 NOSTRO accounts in all major currencies
and non-account correspondent banking relationship with all major
banking groups in the world. Online remittance facility has been made
available for NRIs and the inward remittances are also facilitated
through tie-ups with Gulf based Exchange Houses. During 2009-10, the
total number of Exchange Houses with which the Bank has such
arrangement, increased to 8. Besides, proprietary forex trading has
continued during the year to take the advantage of the market
movements.

During 2009-2010, the Banks NRI deposits increased to Rs.816 crore,
recording a growth of 6.9% over the previous year. Despite steep fall
in countrys exports and imports, the Banks merchant turnover
increased from Rs. 14,818 crore during 2008-09 to Rs.14,863 crore
during 2009-10. Export credit outstanding declined marginally from Rs.
1,738 crore as at end-March 2009 to Rs. 1,735 crore as at end-March
2010.

INDUSTRIAL REHABILITATION

In the area of Industrial Rehabilitation, the Bank continued to
emphasize on timely placing the potentially viable units under
rehabilitation / restructuring packages drawn under the aegis of
BIFR/Corporate Debt Restructuring (CDR) system. The Bank has its own
Industrial Rehabilitation Policy and Policy for Sale of NPAs which are
reviewed and updated from time to time. For recovery of Banks dues in
hard core stressed cases where rehabilitation/ restructuring is not
feasible, other measures including action under SARFAESI Act, legal
recourse, compromise settlements, assignment of debt, are being
adopted.

As at end-March 2010, the Bank had 27 large sick/weak units on its
books with aggregate outstanding of Rs.224.88 crore. There were 16 CDR
cases with aggregate exposure of Rs.423.75 crore and 23 BIFR cases with
exposure of Rs.200.58 crore. The Bank has been acting as BIFRs
operating agency in 9 cases. During the year under review, 8 accounts
with the exposure of Rs.215.65 crore have been restructured under the
CDR mechanism as required by the economic crisis.

NPA MANAGEMENT

In order to control the Non-Performing Assets (NPAs), the Bank has been
intensively monitoring large value accounts, following closely with
DRT/ BIFR and undertaking restructuring of viable accounts besides
utilizing the remedies available under the SARFAESI Act. Wherever
desirable, the outright sale of un-productive assets to Asset
Reconstruction Companies is also considered by the Bank. The progress
in respect of current and potential NPAs is monitored on a daily basis
by providing separate templates on the Banks Intranet site, and also
discussed with regional and zonal offices through periodical
videoconferencing. The total number of NPA free branches stood at 83 as
at end-March 2010, unchanged from the previous year.

Total reduction in NPAs during the year

2009-10was Rs.395.18 crore. However, due to continued stress faced by
many sectors of the economy, new additions to NPAs stood at Rs.516.70
crore. As a consequence, the gross and Net NPAs increased to Rs.611.85
crore and Rs.271.25 crore respectively as at end- March 2010, compared
to Rs.490.33 crore and Rs.252.94 crore respectively as at end-March
2009. The Gross NPA ratio increased from 1.63% as at end- March 2009 to
1.72% as at end-March 2010, while the net NPA ratio improved from 0.85%
as at end-March 2009 to 0.77% as at end-March 2010. The Bank is putting
in place a multi-pronged strategy to reduce NPAs during the year
2010-11.

RISK MANAGEMENT

The Bank has an integrated Risk Management System to deal with the
credit, market and operational risks. Risk management function is
undertaken with the help of well-designed organizational structure
consisting of different Committees at various tiers of administration.
At the apex level, there is a Risk Management Committee of the Board
(RMCB) which is responsible for policy and strategy for integrated risk
management in the Bank. Besides, there are Credit Risk Management
Committee (CRMC), Asset Liability Management Committee (ALCO), Market
Risk Management Committee (MRMC) and Operational Risk Management
Committee (ORMC) for formulating and reviewing the risk management
policies and monitoring their implementation. Zonal Risk Management
Committees (ZRMCs) constituted at the Zonal Offices manage operational
risk at branches under their control. The Bank is Basel-ll compliant
and the Capital to Risk Weighted Assets Ratio (CRAR) is also being
worked out as per the guidelines of Basel-ll.

The risk management policies covering credit, market and operational
risks envisage identification, measurement and management of major
risks faced by the Bank. These policies are reviewed and updated from
time to time keeping in view the dynamic business environment. During
2009-10, the third phase (Part-I) of Risk & Control Self Assessment
(RCSA) workshop was completed at 350 branches. Phase-Ill (Part-ll) of
RCSA has also been rolled out at the remaining 348 branches, BPR
Processing centres and HO

Departments. The Operational Risk Management Manualjs also in place for
the help of the operating staff.

In terms of RBI guidelines, the Bank is endeavouring to get the
corporate customers rated by external agencies for which the tie-ups
have been made with CRISIL, ICRA, CARE and Fitch (India) Ltd. Stress
testing is being done regularly for both credit and market risks and
the policies relating to such stress are updated annually. The Bank is
in the process of migrating to advanced approaches and the creation of
a historical data base for the purpose of computing Probability of
Default (PD), Exposure at Default (EAD) and Loss Given Default (LGD).

During the year, mid-office (domestic and forex) has been shifted from
Treasury and brought under the control of Integrated Risk Management
Department for effective monitoring of Market Risk, independent of
treasury operations. To monitor the resilience of the Investment
Portfolio of the Bank, stress tests and scenario analysis on market
risk covering events such as decline in stock indices, rise in bond
yields and adverse movement in foreign exchange rates have been
conducted regularly during the year as per the Stress Testing Policy of
the Bank.

The Bank has-a comprehensive Asset Liability Management (ALM) system in
place for effective management of liquidity position. The Asset
Liability Management Committee (ALCO) oversees and gives guidance for
managing liquidity mismatches in line with the prudential guidelines of
RBI and Banks internal policies.

INTERNAL CONTROL, INSPECTION AND AUDIT

A well-established independent audit system and structure is
functioning in the Bank to ensure adequate internal control for safe
and sound operations. Internal Audit is carried out under Risk Focused
Internal Audit (RFIA) as envisaged under Risk Based Supervision of RBI
with focus on assessment of risk and internal control mechanism.

The branches have been categorized into three groups as per risk
perception and are subject to varying degrees of audit. During 2009-10,
606 branches and 55 Cells under Business Process Re-engineering (BPR)
initiatives h^ve been subjected to internal audit. No branch of the
Bank remained overdue for audit as on 31.03.2010. 124 branches,
covering 66.8% of advances, 50.8% of deposits and 95.0% of the non-
fund based business have been placed under continuous surveillance
through the concurrent audit. Besides, 12 Head Office Departments and
25 BPR entities are also subjected to concurrent audit system. IS audit
cell is in place to conduct IS audit of major IT establishments
including Core Banking project, Zonal Computer Centers, etc. in
accordance with RBI directives and Banks IT Security Policy.

As at end March 2010, 98.9% of total branches of the Bank were rated
"Efficiently Run" or "Well Run."

RECONCILIATION OF INTER OFFICE TRANSACTIONS

As per RBI guidelines, all the entries need to be reconciled within a
period of six months from the date of their origin. By end-March 2010,
the Bank had reconciled inter-branch transactions originated upto
31.12.2009 i.e. well before the time limit prescribed. The Bank is
committed to perform better than the target set by RBI and shall aim at
reconciling all entries within two months of their origin.

INFORMATION TECHNOLOGY MOBILE BANKING

After successful implementation of core banking solution, the Bank has
taken technology to the next level by providing mobile banking facility
for the customers during the year. This new product viz. State Bank
Freedom provides mobile banking facility to customers having savings
or current account with the Bank with an upper ceiling of Rs.50000 for
funds transfer and for purchase of goods / services per day within
overall calendar month limit of Rs.2.50lakh.

AUTOMATED TELLER MACHINES (ATMS)

During 2009-10, the Bank launched an aggressive drive to expand its ATM
network. A total of 455 new ATMs were installed during the year as
against 89

ATMs installed in the previous year, taking the total number of ATMs to
950 including 3 Mobile and 5 Biometric ATMs. With this the number of
ATMs has surpassed the number of branches of the Bank. All the ATMs are
connected to the network of State Bank Group ATMs, thereby enabling
more than 28.9 lakh cardholders of the Bank to have access to over
21,465 ATMs of the State Bank Group all over the country. The customers
can also access ATMs of other Banks free of charge upto five
transactions per month subject to a maximum of Rs. 10,000 per
transaction.

INTERNET BANKING

Internet banking facility for personal and corporate customers is
available at all the branches of the Bank which enables the customers
to undertake banking transactions from the comfort of their homes or
offices. Various facilities available through internet banking include
on-line funds transfer, payment of certain direct and indirect taxes of
Central and State Government, on-line application of Initial Public
Offers (IPOs), booking of railway tickets, payment of railway freight
and utility bills of more than130billers.

In order to enhance the awareness about internet banking amongst
customers as well as staff members, the Bank has organized various
seminars and workshops besides releasing advertisements in the
prominent newspapers. Internet banking kiosks have been installed at 77
branches. With special emphasis, the total number of internet banking
users has nearly doubled during the year to 3.52 lakh, including 3.24
lakh retail customers and 28,430 corporate customers. The Bank has
launched a Loyalty Rewards Programme for retail internet banking
customers w.e.f. March 1,2010 to further popularize the product.

E-TRADE FACILITY

The Bank had launched an E-Trade facility during 2008-09 in association
with SBI Cap Securities Ltd., with the help of which, the customers can
trade on-line in stock markets, invest in IPOs or mutual funds.
Encouraged with the response, all the branches of the Bank have been
authorised to source the applications for Demat and E-trade accounts.

ELECTRONIC PAYMENT SYSTEMS

The Bank has continued to take measures to popularize Real Time Gross
Settlement (RTGS) and National Electronic Fund Transfer (NEFT) which
enable the customers to make their inter-bank remittances in a cost
effective, faster and secure manner through any branch or the internet
banking mode. Besides,State Bank Group Payment functionality for
electronic funds transfer within the State Bank Group is also available
to the customers of the Bank.

IT SECURITY

The Bank has a comprehensive IT and Information Systems (IS) Security
Policy that addresses the threats and risks associated with IT enabled
services including addressing concerns of maintaining customers
confidentiality, security and integrity of data. The Banking
applications have built-in security features like access control, data
encryption and transmission through secured channels as per the
requirement of the application. The threat of virus is minimized by
having a centralized anti-virus solution. Adequate Firewalls and
Intrusion Detection Systems are in place so as to prevent unauthorized
access to the network. The security of the network is being managed by
Network Management Consultants of the Bank. The Disaster Recovery Plan
(DRP) and Business Continuity Plan (BCP) for all the branches are in
place. During the year, a Disaster Recovery site for Head Office
applications has been activated at the Zonal office, Udaipur, which
initially covers service tax, debt relief and pension applications.

Steps have been taken to increase security awareness amongst the staff
as well as the customers. An E-bulletin on IS Security and IT
Governance has been made available at the Banks intranet site w.e.f.
August 2009. A handbook viz. "Tips on Information Systems Security" has
also been brought out. Besides, sessions on information Security have
been made a regular feature in the training programmes conducted at the
staff training centers.

In order to identify and examine suspicious transactions, the Bank has
installed the AMLOCK software besides setting up an Anti Money
Laundering Cell at the Head Office. The customers accounts have been
divided into different risk categories and alerts are generated once
any transaction exceeds a pre-defined threshold limit. These alerts
help in identification of suspicious transactions, which are further
reported to Financial Intelligence Unit, Government of India, in
appropriate cases.

CUSTOMER SERVICE

The primacy of the customer is the cornerstone of the Banks policy.
Accordingly, providing value added services and upgradation of key
processes is a continuous feature in the Bank which has vastly helped
in providing customers a highly satisfying banking experience.

A robust grievances redressal mechanism is in place in the Bank to
address the problems faced by the customers and take proactive steps to
mitigate them. The standards of customer services are periodically
reviewed by the Customer Service Committee of the Board and Standing
Committee on Customer Service. Besides, meetings of the Customer

Service Committee at the Head Office, Zonal Office & branches are
regularly held to oversee the customer service standards. Customers are
invited to attend the customer relations programmes to review the
quality of services rendered and to initiate measures for bringing
about on-going improvement in the service quality. The Bank abides by
the Code of Banks Commitment to Customers instituted by the Banking
Codes and Standards Board of India and is committed to provide quality
services to its esteemed customers.

DISCLOSURE OF COMPLAINTS/ UNIMPLEMENTED AWARDS OF BANKING OMBUDSMEN

In terms of RBI circular DBOD. No. Leg BC.60/09.07.005/2006-07 dated
22.02.2007, the information in respect of customer complaints and
awards passed by Banking Ombudsmen is given in the Table below:-

A. Customer Complaints

(a) No.of Complaints pending 31
at the beginning of the year

(b) No. of Complaints received 3703
during the year(*)

(c) No. of Complaints redressed 3677
during the year(*)

(d) No. of Complaints pending 57
at the end of the year

(*) Exduding 1660 complaints found
non-maintainable.

B. Awards passed by the Banking Ombudsmen

(a) No. of unimplemented Awards at the beginning of the year

(b) No. of Awards passed by 1 the Banking Ombudsmen
during the year

(c) No. of Awards implemented 1 during the year

(d) No. of unimplemented Awards at the end of the year

BUSINESS PROCESS RE-ENGINEERING

The Business Process Re-engineering (BPR) initiatives at select centers
have gathered further momentum during 2009-10 with the loan Central
Processing Cells (CPCs) migrating to end-state, thereby empowering the
linked branches to concentrate on sales and service and optimize
transaction costs. As at end-March 2010,15 loan CPCs at 14 centres
including Retail Assets Central Processing Centre (RACPC) / Small and
Medium Enterprises City Credit Centre (SMECCC) / Retail Assets and
Small and Medium Enterprises City Credit Centres (RASMECCCs) are
handling appraisal as well as maintenance of retail and SME loans for
238 linked branches. 8 Relationship Managers-Medium Enterprises
(RM-MEs) are pro-actively mobilizing asset business from new and
existing customers by providing them single-point contact at 5 centres.
Rural Central Processing Centres (RCPCs) are operating at 11 centres
catering to loan products in rural and semi-urban branches on
proto-type basis. Stressed Assets Resolution Centres (SARCs) operating
at 14 centres have helped in reducing workload of recovery from the
linked branches with minimum time and costs. As at end-March 2010, 3
Trade Finance Central Processing Centres (TFCPCs) are operating at
Jaipur, Delhi and Udaipur, handling trade finance related back office
operations covering Inland and Foreign Trade transactions, including
issuance of Bank Guarantees and Letters of Credit.

The Bank has positioned 19 Relationship Managers-Personal Banking
(RM-PBs), providing relationship-based services to High Networth
Individuals at 15 centres. Multi Product Sales Teams (MPSTs) are
operating at 13 centres for doorstep marketing of retail loans, small
enterprise business loans as also liability products. These teams also
canvass cross-selling products of non-banking subsidiaries of SBI viz.
SBI Life and SBI Mutual Funds.

The Liability Central Processing Centre (LCPC) located at Jaipur
functions as a centralized, computerized, core- enabled back office,
for opening and maintenance of liability accounts and related KYC
compliances. The LCPC manages the providing of Welcome Kit,
personalized cheque books, scanning and linking of signatures and
centralized storage of account opening forms & related documents.
Currently 281 branches are linked to LCPC with the coverage proposed to
be extended to all branches in due course.

Keeping in view the centrality of customers, the Bank has taken up
redesigning of branches in an aggressive manner. As at end-March
2010,114 branches at BPR centres have been re-designed as per the
requirements of BPR initiatives of the Bank

CROSS-SELLING

Cross-selling of life and non-life insurance, mutual funds and credit
card products has emerged as an important avenue to augment the
non-interest income of the Bank. For the purpose, the Bank has in place
tie up arrangements with SBI Life Insurance Co. Ltd., National
Insurance Co. Ltd., SBI Mutual Funds, Birla Sun Life Mutual Fund and
SBI Cards & Payments Services Pvt. Ltd. During 2009-10, the Bank
launched several campaigns for marketing of these products which helped
in increasing the total income from cross selling activities from Rs.
12.02 crore in 2008-09 to Rs. 19.24 crore in 2009-10, recording a
growth of 60.1%.

APPLICATIONS SUPPORTED BY BLOCKED AMOUNT (ASBA)

In order to impart greater efficiency in public issuances, a
supplementary process of applying in the public issues has been
introduced by the Securities and Exchange Board of India (SEBI) viz.
Applications Supported by Blocked Amount (ASBA). The Bank has been
authorised by SEBI as Self Certified Syndicate Bank, eligible to accept
applications under the ASBA process. Upon stabilization of the Scheme,
the Bank has designated 8 more branches during 2009-10, which can
acceptthese applications, taking the total number of designated
branches to 15. A total business of Rs.22.91 crore has been handled
under the ASBA process during the year under review.

COMMUNITY SERVICES BANKING

As a responsible Corporate citizen, the Bank continues to undertake
community based social activities such as tree plantation, free medical
camps, blood donation camps, establishing water huts, sports
competitions, etc. During 2009-10, the Bank provided two delivery vans
to the Akshaya Patra Foundation, Jaipur, for transportation of mid-day
meals to the under-privileged children in the Government schools.
Assistance was provided to Life Line Foundation engaged in the
security, help and welfare of people suffering from accidents on the
National Highways. The Bank honoured widows of ex- servicemen/
martyred soldiers in a rally organised for the welfare of war-widows
atSikarandChuru. Every branch of the Bank continued to adopt one girl
child each from a poor family with an objective of providing financial
assistance for pursuing studies in Government/Municipal schools. During
the year, Jaipur Foot were distributed to physically challenged
persons while blankets/ quilts/ sweaters were distributed to the needy
people. Assistance was also provided for development of a public park
at Barmer.

Besides, State Sports Council was provided assistance for organizing
summer sports camp for grooming junior sportspersons and the
meritorious students of the State were honoured with cash rewards and
SBBJ Trophy.

The Bank continuously endeavours to reach out to the minority
communities particularly in the minority concentration districts/ towns
identified by RBI. As at end-March 2010, assistance to these
communities stood at Rs.843.60 crore spread over 71,428 accounts, while
the financing to weaker sections stood at Rs.5083.66 crore benefiting
6,71,802 persons. The ratio of assistance to weaker sections as a
percentage of Adjusted Net Bank Credit stood at 16.89%, as at end-March
2010, which was above the benchmark of 10% prescribed by RBI.

Under Government sponsored schemes viz. Swarn Jayanti Gram Swarojgar
Yojana (SGSY), Swarn Jayanti Shahri Rojgar Yojana (SJSRY), Scheme for
Liberation and Rehabilitation of Scavengers (SLRS) and Differential
Interest Rate (DIR) Schemes, the total demands for recoveries from SC/
ST borrowers was made at Rs. 14.53 crore during the year. Against this,
the actual recoveries stood at Rs.8.23 crore, i.e.56.6% of the demand
made.

LEAD BANK SCHEME

The Bank continues to have lead bank responsibility in nine districts
of Rajasthan viz. Barmer, Bikaner, Hanumangarh, Jaisalmer, Jalore,
Pali, Rajsamand, Sirohi and Udaipur. The Bank has been implementing and
monitoring the annual credit plan and other developmental and poverty
eradication schemes launched by Government of India, Rajasthan
Government, NABARD and other developmental agencies in these districts.
Out of the total Annual Credit Plan of Rs.5,010 crore for the year
2009-10 set for all banks operating in these nine lead districts, the
Banks share was envisaged at Rs.1,195 crore, against which the Banks
performance stood atRs.1,793 crore as on 31.3.2010 recording an
achievement of 150.1 %.

RURAL SELF EMPLOYMENT TRAINING INSTITUTE (RSETI)

In order to address the problem of unemployment amongst youth, the Bank
has set up a "Skill & Entrepreneurship Development Institute (SEDI)" in
Pali district and seven "Rural Self Employment Training Institutes
(RSETIs)" at Bikaner, Sirohi, Jaisalmer, Jalore, Barmer, Rajsamand and
Hanumangarh districts. Of these, two RSETIs at Jalore and Barmer were
set up during 2009-10. By end-March 2010, 7836 candidates have been
trained at these institutes and with the help of this training, 2051
candidates have been engaged in various jobs.

KISAN CLUBS AND TRAINING TO FARMERS

The bank has formed 472 Kisan Clubs as at end-March 2010. The 9 Lead
District Offices conducted 374 training programmes for farmers for
providing awareness on latest technological developments in
agriculture, horticulture, dairy and vermiculture, etc. A total of
16,116 farmers have benefited from these training programmes.

REGIONAL RURAL BANK

The Bank has sponsored one Regional Rural Bank (RRB) viz.MGB Gramin
Bank, which has a network of 216 branches spread over six districts
viz. Pali, Jalore, Sirohi, Sriganganagar, Hanumangarh and Bikaner. The
Bank continues to provide managerial support and financial assistance
to MGB Gramin Bank. During 2009-10, the Bank enhanced the refinance
limit for this RRB from Rs.212.62 crore to Rs.301.50 crore.

The Bank is in the process of providing technical assistance to MGB
Gramin Bank for implementation of core banking solution and 10 branches
have been brought under CBS on a pilot basis. As at end March 2010, MGB
Gramin Bank had deposits of Rs.1,787 crore, advances of Rs.1,433 crore
and recorded a profit before tax of Rs.22.63 crore during 2009-10.

BRANCH EXPANSION

During 2009-10, the Bank opened 10 new fully computerized branches. In
an important restructuring exercise, the Bank converted 3 service
branches into Centralised Clearing Processing Centres (CCPCs) while 5
service branches were closed down and their operations were shifted to
CCPCs. Besides, two branches at Kolkata were merged into one branch.
As at end- March 2010, the total number of branches stood at 861,
comprising 858 business branches, 2 asset recovery branches and 1
treasury branch. Of these, there are 297 rural branches, 242 semi-urban
branches, 157 urban branches and 165 metro branches. The number of
branches in Rajasthan increased to 703, which is the largest among all
banks. Out of these, 532 branches are located in rural and semi- urban
areas, which play an important role in rural development and poverty
alleviation in the State.

BRANCH AMBIENCE

During the year 2009-10, the Bank continued the exercise for
face-lifting of branches so that the customers get adequate space and
comfort while transacting their business. A total of 34 branches were
renovated during the year.

HUMAN RESOURCES DEVELOPMENT

The Banks staff strength as on 31.03.2010 was 12,356 employees. Of
these, 2,581 (20.9%) belong to Scheduled Caste (SC) and 995 (8.1%)
belong to Scheduled Tribe (ST) categories. The reservation policy of
the Government is being implemented scrupulously in the Bank. The Bank
promoted 201 clerical staff to supervising cadre and recruited 137
Probationary Officers in addition to 613 clerical cadre employees
during 2009-10.

The Bank believes that its human resources are the most important
constituents and their development is necessary for growth of the Bank.
In the dynamic business environment, it is necessary that adequate
training and sensitization is provided to the staff members on an
on-going basis. During 2009-10, a total of 6,047 employees, including
228 employees of the sponsored RRB, were provided training on various
subjects related to banking and technology at the three Staff Training
Centres of the Bank. Pre- recruitment training was provided to 484
SC/ST candidates appearing in the written test for recruitment of
officer cadres during the year. Besides, 45 seminars / workshops were
conducted to update the skills of the employees on contemporary issues.
During the year 2009-10, 760 officials were deputed to apex training
institutions within the country while 6 officials were deputed to
prestigious foreign training institutes for specialized training.

ORGANISATIONAL PUNNING

With a view to facilitating improved supervision, organizational
effectiveness and customer services, 9 branches were reallocated during
2009-10from Region-Ill (Pali district) to Region-IV (Nagaur district)
in the Jodhpur Zone. Reorganization of Credit Department at Head Office
was undertaken and the roles and responsibilities of Central Processing
Cells were clarified. In order to improve operational control and
exploit business potential, the incumbency of Clearing CPC (Jaipur),
RASMECCC (Kolkata) and N.S. Road (Kolkata) were upgraded to Senior
Management Grade Scale (SMGS)-V during the year.

STAFF WELFARE

During 2009-10, the insurance cover for employees under the group
insurance scheme of SBI Life was increased from Rs.5 lakh to Rs.6 lakh
(Rs. 10 lakh to Rs. 12 lakh in the case of accidental death) besides
waiver of housing loan of the deceased employees to the extent of
Rs.2lakh. Two new holiday homes were set up at Chandigarh and Mussorie
apart from the existing holiday homes at Jaipur, Mt. Abu, Manali,
Mumbai, Goa, Delhi, Haridwar, Nainital, Katra, Bengaluru and Udaipur.
Other staff welfare activities like granting scholarship to meritorious
wards of employees and providing free medical consultancy services at
various hospitals were continued. The Jodhpur Zone also organized an
All India Kabaddi Tournament during the year.

INDUSTRIAL RELATIONS

The industrial relations in the Bank continued to remain cordial during
the year under review. The Employees Union and Officers Association
have extended their wholehearted cooperation for the all-round growth
of the Bank. A well-established and consultative mechanism is available
in the Bank, for resolution of various issues emerging from time to
time.

VIGILANCE ADMINISTRATION

The Bank considers the Vigilance Administration as an integral part of
the Management. Particularly, preventive vigilance activities are being
accorded high priority in the Bank rather than detective and punitive
aspects of vigilance. The Vigilance Department conducts Preventive
Vigilance Inspections that help in timely detection of frauds and in
plugging the loopholes in the systems and procedures. They also create
awareness among the staff members about certain vital systems and
procedures at the branches. Complaints received in the Vigilance
Department are dealt with expeditiously and in a professional manner.
In order to decide vigilance angle, complaints received in the
Vigilance Department are put up to the Internal Advisory Committee,
consisting of two General Managers and one Dy. General Manager.
Significant emphasis is laid on the transparency in the tendering
process (procurements of goods and services, auctions, etc.) by the
Bank. The tenders issued by the Bank are uploaded on the Banks
website as well as Government of Indias (NICs) website. The Bank has
also issued guidelines for lodging complaints under the "Whistle Blower
Policy". A special appeal on the subject of "Whistle Blower Policy" was
uploaded on the intranet website of the Bank for motivating the staff
to make use of the policy. As in previous years, the Bank celebrated
Vigilance Awareness Week in the month of November 2009, as per the
guidelines issued by the Central Vigilance Commission.

USE OF HINDI

The Official Language Implementation Committee at Head Office held 8
meetings during the year to discuss the progressive use of Hindi in the
Bank. 849 branches / offices of the Bank have been notified under rule
10 (4) of the Official Language Rules 1976. Out of these, 702 branches
/ offices are specified under rule 8(4), which constitute 82% of total
notified branches / offices of the Bank.

Section 3 (3) of Official Languages Act, 1963 is being meticulously
followed in the Bank. Facility of Hindi version has also been made
available in the Core Banking Software. In compliance of the orders of
the Honble President of India, "Unicode" system has been implemented
in the Bank and all the ATMs are operated in bilingual/ trilingual
manner.

Hindi Fortnight was observed during September 1-14, 2009, during
which various competitions were held and prizes awarded to the winners.
To impart the knowledge of Official Language Policy and job oriented
Hindi, 37 workshops/ training programmes were organized. During the
year, 901 branches / offices were inspected for implementation of the
Official Language. To increase progressive use of Hindi, competitions
for Head Office Raj Bhasha Trophy and Zonal Raj Bhasha Trophy were
organised during the year. In compliance of the directions given by
Third sub-Committee of the Sansadiya Rajbhasha Samiti, 17 Departments
at Head Office and 8 Departments of each Zone are working completely in
Hindi.

State Bank of India, with the concurrence of the Reserve Bank of India,
approved the appointment of five firms of Chartered Accountants viz.
M/s Vyas & Vyas of Mumbai, M/s L.U. Krishnan & Co. of Chennai, M/s B.
Khosla&Co. of Jaipur, M/s S.L. Chhajed & Co. of Jaipur and M/s S.C.J.
Associates of Agra as the Banks Statutory Central Auditors for the
year 2009-10. The scope of audit covered 829 branches/ central
processing cells as against 854 branches/ central processing cells
covered in 2008-09.

RESPONSIBILITY STATEMENT

The Board of Directors hereby states:

i. that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;

ii. that they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Bank as on the 31st March 2010, and of the profit or loss of the
Bank for the year ended on that date;

iii. that they have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Banking Regulation Act, 1949, and State Bank of India
(Subsidiary Banks) Act, 1959 for safeguarding the assets of the Bank
and preventing and detecting frauds and other irregularities; and

iv. that they have prepared the annual accounts on a going concern
basis.

CORPORATE GOVERNANCE

The Details on Corporate Governance are annexed.

ACKNOWLEDGMENTS

The Board of Directors is grateful to the valued customers, esteemed
shareholders and the public at large for their patronage and confidence
reposed in the Bank and places on record its deep appreciation. The
Board of Directors thanks the Government of India, State Bank of India,
Reserve Bank of India and other regulatory agencies for their valuable
support and guidance throughout the year.

The Board of Directors places on record its deep appreciation of the
commitment, sense of involvement and dedication exhibited by each staff
member and constructive role played by the Employees Union and
Officers Association in the overall development, growth and prosperity
of the Bank.